The Real Deal New York

Black Spruce sells Flatbush property to Parkway for $27M

Building goes for $250K per unit, among the highest in the area
By Claire Moses | April 09, 2015 03:00PM

Black Spruce Management, a Midtown-based investment firm led by Josh Gotlib, sold a seven-story Flatbush rental building at 520 East 21st Street for $26.5 million, The Real Deal has learned.

Parkway Realty Group bought the building, which includes more than 100 residential units across roughly 103,000 square feet of residential space. Parkway also owns the neighboring property.

Rosewood Realty Group’s Aaron Jungreis represented both sides in the off-market transaction. Jungreis declined to comment.

Black Spruce bought the building in 2013 for $15 million, property records show.

The price comes down to $250,000 per apartment, which is the third highest per-unit sales price in the area in the past year, according to Jonathan Miller of Miller Samuel Real Estate. In the entire borough, Miller added, there were 23 properties in 2014 that traded for more than $250,000 per unit.

“Clearly,” Miller said, “this is pushing the envelope in Flatbush.”

Last week, Black Spruce bought seven Bronx properties that are part of a 42-building portfolio owned by Westbrook Partners and Normandy Real Estate for a combined $58 million.

 

  • richjew

    Large apartments. Could easily be chopped into a total of 120units. If you figure that way they paid 200k a unit. Which is pretty cheap for brooklyn properties of this size.

    • poorjew

      You are not taking into account the costs it would to take to do that. as well as all the filings required to get city approvals to add units.

      • richjew

        Add 10k a unit. Still not bad. Also the building has a garrage. Not sure why they didnt put that into article.

        • poorjew

          the grm is probably astronomical

          • kingmaker

            He buys junk buildings with high violations. Turns them around.
            Unlike the “other guys” who buy finished buildings and mess around with the banks. VIA the infamous brother / Mortgage broker.

          • richjew

            They buy Clean buildings with juice in them. Then they squeeze and squeeze!

          • rental guy

            Until the rates go up.
            Seen this all before.

          • richjew

            Yup. Funny thing is while we sit here talking about all the pros and cons of the buildings and management, interest rates etc. these guys are laughing they’re way to the bank.

          • rental guy

            Weinbergers a sharp kid he sold well.
            And recently bought well .
            No mezzanine loans like hass.
            I like how hes operating.
            Let’s see where it goes.

    • If you chopped these apartments up you’d have to abide by the current zoning code, which would make such a conversion impossible for a number of reasons (the first that comes to mind is parking – no way this property has a 50% parking ratio for the existing units, nevermind the new ones you’d add).

      • richjew

        You would if you were a regular landlord, or if you ever plan on selling.
        Im guessing these guys they will do it, no questions asked. And they for sure dont plan on ever selling.

  • Rafi

    Bernie owns a lot on the block and in the neighborhood which adds to the equation why he would overpay a little. Also its almost Prospect Park South, you can call it East Flatbush but the close proximity to the park neighborhoods adds value.

    • richjew

      Who did he buy it with?

      • Rafi

        Yechiel

        • richjew

          Add another missmanaged building to the collection:)

          Should have bought it with the other guys.

          Wasnt weinberger telling everyone hes sellin out of brooklyn?

          • Rafi

            I never heard he was selling out of Brooklyn. He sold some of his buildings in Brownsville and ENY but none in any prime neighborhoods. Why do you say add a mismanaged building ? Have you been in all his buildings or hearsay.

          • richjew

            Check out N.Y.C worst landlord list.

          • Rafi

            The worst Landlord list is a terrible barometer to use to judge the management quality of a landlord with 50 plus Buildings. Chances are there will be a building or 2 that have a lot of violations due to numerous reasons including mismanagement but also problem tenants bad contractors and 100 plus year old buildings. The list is just a compilation of buildings with the most violations. Ive seen buildings with no violations that were in terrible shape and vice versa. You have to walk a building to actually judge its condition.

          • richjew

            Bottom line is a good landlord will not be on it. A bad landlord will. If its a fluke as you claim. He would not continuously be on the list.
            There are many managers in N.Y.C with as many buildings that are not on the list. The reason is because they are meticulous in they’re management.

            P.S i have walked some of the bronx properties

          • rental guy

            Dixon who bought it from him folded.
            Not even a year.
            Rosewood trying to sell at 300 a door to recover expenses

          • richjew

            Those buldings are on the market?

          • rental guy

            Yup. I’m on the block. Buildings half empty with all the tenants associations back. Crackhead in the lobbys. Terrible.
            But studios at 300? No way.

          • richjew

            Oh well! Nice buildings but small apartments. Dont think the are worth more than 200k a door.

          • rental guy

            I remember when weinberger bought it from shemtov. Tough buildings. I think you are wrong about him. He’s bought big in Brooklyn recently .
            Check what he did with Kramers stuff on the parkway.

  • dick

    The capex to maximize value here will be astronomical! Especially when taking into consideration that the units are larger which means may be harder to pay tenants to get them to leave. Creating more units is too expensive, the best bet here will be to create more bedrooms within each unit. The GRM must be ridiculous, can’t wait to see what loan they got from the bank on this. They will be eating dirt for a very long time.

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