Brookfield in contract for $1B Upper Manhattan portfolio

Real estate giant set to close on nearly 4,000-apartment package in September

TRD New York /
Aug.August 11, 2014 04:51 PM

The large real estate investment company Brookfield Property Partners signed a contact last month to acquire a 3,962-unit portfolio of apartment buildings in Upper Manhattan, the company said in a public filing last week. Acquiring the portfolio would increase the value of its residential holdings by about a third.

Brookfield did not identify the portfolio by name or give the purchase price, but as The Real Deal reported in March, the company was angling to buy the 3,962-unit Putnam portfolio from the New Jersey-based landlord Urban American and other investors for about $1 billion. Sources said the investors include the government sponsored home financing company, Fannie Mae.

Brookfield is developing residential apartments as part of its Manhattan West project in Hudson Yards, and an affiliate has been in negotiations to carry out a non-eviction condominium conversion at the 11,000-unit Stuyvesant Town and Peter Cooper Village.

Ric Clark, Brookfield CEO, mentioned the Upper Manhattan purchase on the company’s second-quarter earnings call last week.

“In July, we executed definitive agreements to acquire a 4,000-unit multi-family portfolio located in Manhattan [which] had a very attractive evaluation relative to replacement cost,” he said, according to a transcript from the SeekingAlpha information service.

Brookfield plans to invest just over $100 million as part of a total equity investment of $320 million in the deal, the company reported.

The Putnam portfolio has multiple addresses including the 1,193-unit 3333 Broadway, the 1,003-unit Roosevelt Landings at 510-580 Main Street on Roosevelt Island; the 761-unit River Crossing at 1940-1966 First Avenue and 420 East 102nd Street; the 600-unit Heritage at 1295 Fifth Avenue, 1309 Fifth Avenue and 1660 Madison Avenue; and the Miles and the Parker at 1890 Lexington Avenue and 1990 Lexington Avenue, with a total of 405 units. Urban American, headed by Philip Eisenberg, and its partners purchased the collection of buildings for about $938 million in 2007.

Brookfield and Urban American declined to comment.

With the purchase, Brookfield will increase the number of apartments it owns in the US from 22,246 mainly garden-style apartments in 12 states to more than 26,000. But it will grow the value of the portfolio by far more.

The current multi-family portfolio is valued at about $3.3 billion with Brookfield’s share worth $865 million, an analysis of Brookfield public filings shows. This would increase the value of the portfolio by about a third, to $4.3 billion.

In addition, the company has other residential projects on its plate, Clark said.

“We are excited about our plans to launch construction of an 850-unit multi-family tower at our Manhattan West development late this year,” he said on the earnings call.

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