Burke Leighton Asset Management doubled its money in two years with the sale of a 200-unit Crown Heights rental building to fast-rising Akelius Real Estate Management for $44 million, The Real Deal has learned.
Akelius, the U.S. arm of Swedish firm Akelius Residential Property, launched earlier this year, and has been on a tear in the city’s multifamily market over the past six weeks.
Burke Leighton, a Brooklyn-based investment firm led by Freddy Sayegh, paid $22 million to the Pinnacle Group and Praedium Group for the property in 2013. Over the eight years that Pinnacle and Praedium owned the property, tenants had rallied against the landlords, alleging that they skimped on repairs and unfairly targeted tenants for rent hikes, as previously reported.
The six-story, 172,000-square-foot property, located at 805 St. Mark’s Avenue in the Crown Heights North Historic District, holds 200 apartments. There is a mix of rent-stabilized and rent-controlled units, and no retail. Rents range from $700 to $1,700 per month.
Akelius is planning to make “significant improvements to the common areas,” said Kunal Chothani, an executive at Akelius.
As for the jump in the property’s sale price over two years, Chothani said, “The previous owner had made some improvements. Their improvements compounded with cap rate compression led to the valuation. There were other offers higher than ours.”
Rosewood Realty Group’s Aaron Jungreis and Billy Billitzer represented both sides.
Akelius has amassed nearly 500 residential units in the city to date. Last week, the firm paid $167.5 million for a 17-story rental building in Gramercy Park, as TRD reported.