Urban American puts big Brooklyn-heavy portfolio on the block

14 properties in Brooklyn and one in Staten Island are expected to fetch more than $200M
By Adam Pincus | September 12, 2014 06:10PM

Urban American Management, one of the city’s leading private equity-backed real estate investment firms during the mid-2000s boom, is listing for sale a mega Brooklyn-focused apartment portfolio likely to trade for more than $200 million.

The 14 buildings in Brooklyn and one garden apartment complex in Staten Island have 1,434 apartments total, with an average monthly rent of just over $1,200 for each unit, documents reviewed by The Real Deal show.

The package of buildings, which was once owned by the dynastic Lefrak family, has an estimated net operating income of just over $8 million, on gross income of about $21 million, the papers reveal.

Urban American tapped Eastern Consolidated’s CEO Peter Hauspurg, Executive Managing Director David Schechtman and Director Marion Jones, to market the portfolio.

A spokesperson for Urban American confirmed the company was marketing a Brooklyn portfolio, “but [has] not decided what action to take.” Eastern Consolidated’s Jones said the brokerage would only confirm it had the exclusive listing.

Urban American and partners bought the portfolio from the LeFrak Organization in 2007 for $251 million, although at the time it was a larger collection of buildings with a total of 2,105 apartment units including several large buildings  in Queens.

In that sale, a team at commercial firm CBRE — including Jones — represented the LeFrak Organization.

The largest properties in the current listing are the 178-unit 2425 Nostrand Avenue in Midwood and the 176-unit garden apartment complex at 2862 Hylan Boulevard in Oakwood, Staten Island.

From 2005 through 2008, the firm partnered with investors such as the City Investment Fund, state pension funds and Fannie Mae, among others, as it amassed a large portfolio managed out of a former yarn factory in West New York, New Jersey.

It’s unclear exactly how many units it now controls, but an analysis of Real Capital Analytics data shows the firm sold about 3,600 units in the city since 2010, and purchased about 1,200 during that time. Insiders say it still maintains significant holdings in the city.

Those sales do not include the firm’s biggest, the looming trade of the so-called Putnam portfolio. Brookfield Property Partners said last month in a public filing it will buy the 3,962-unit portfolio in Upper Manhattan. Insiders said it will likely trade for $1 billion.

The Urban American spokesperson said the company was not selling its interest in the Putnam portfolio.

“[Urban is] going to be in a [joint venture] with Brookfield to continue to own and operate the 4,000 units in the Putnam portfolio, in the same manner that they have to date,” the spokesperson said in an email.