After buying three properties for a combined $15.2 million, Madison Realty Capital is now the owner of an entire city block on Frederick Douglass Boulevard between 111th and 112th streets, The Real Deal has learned.
Madison, together with RWN Real Estate Partners, bought the properties at 2049, 2051 and 2059 Frederick Douglass Boulevard, as well as 15,000 square feet of air rights. Westwood Realty Associates’ Steven Vegh was the sole broker on the off-market transaction, which closed last night.
In July, Madison bought the adjacent properties on the same block for $30 million. In total, Madison and RWN now own 85,000 square feet of mixed-use property on the block. The properties include 81 apartments, eight potential retail spaces and approximately 45,000 square feet of air rights.
Josh Zegen, co-founder and managing principal of Madison Realty, said he is looking to keep the buildings intact.
“Our plan is really to ultimately maximize value of the apartments as they come available,” he said. The buildings — which offer one-, two- and three-bedroom apartments, both rent-regulated as free market — will remain rentals, he said.
“We believe in the long-term value and keeping the market moving,” Zegen added.
While the available air rights provide a potential development opportunity in the future, Zegen said he has no plans for that in the near term.
More and more families and students are moving to the area, Zegen said. “We think it’s an extension of the Upper West Side,” he said.
Upscale eateries are increasingly sprouting up on Frederick Douglass Boulevard, including an outpost of Levain Bakery — an Upper West Side stronghold best known for its fluffy chocolate chip cookies — a few blocks away.
Rents for retail in the area are exceeding $100 per square foot, up from $60 a square foot a few years ago, Zegen said.
Madison’s first foray into Harlem happened when the firm bought a property on 111th Street between Lenox Avenue and Adam Clayton Powell Boulevard in 2011, which it sold for a big profit earlier this year. Zegen said he is actively looking for more acquisition opportunities.
Buying up the entire block, however, was more serendipitous than planned.
“It wasn’t crucial to the business plan to acquire, but it really accelerates and augments the business plan to have the additional air rights and development potential,” Zegen said. “It’s hard to get a whole block.”