A&E Real Estate Holdings has cut a $201 million deal with the city to buy a Harlem housing complex that will keep nearly 1,000 affordable housing units stabilized in exchange for hefty tax breaks.
Douglas Eisenberg’s firm bought the Riverton, which consists of 1,229 apartments across seven buildings, and agreed to keep 975 units affordable for 30 years, the New York Times reported. In exchange, the new owner will receive just over $100 million in tax breaks from the city. Eisenberg and his partners have also agreed to make $40 million in capital improvements to the complex.
The former owner, Larry Gluck’s Stellar Management, purchased the complex in 2005 in hopes of bringing in higher-paying tenants. But Stellar defaulted on its $225 million mortgage and its lenders foreclosed. CWCapital, which controlled Stuyvesant Town after Tishman Speyer defaulted, took over the complex in a 2010 auction.
The purchase is the latest in a series of multifamily purchases made by Eisenberg. In October, his firm bought a six-story elevator building in Jackson Heights for $22 million. The investment firm also scooped up 32 buildings across three borough from the Dermot Company in February for $360 million.
Mayor Bill de Blasio and other city officials are touting the Riverton deal as an important step in preserving affordable housing in the city and warding off gentrification in the neighborhood.
Though significant, the tax break falls short of the sum recently provided to the Blackstone Group and Ivanhoe Cambridge, which received $225 million worth of benefits for its purchase of Stuyvesant Town from CW Capital. The new Stuy Town owners received a $144 million acquisition loan, which carries no interest over 20 years, essentially amounting to a subsidy. The city also offered a $77 million mortgage tax waiver. [NYT] — Kathryn Brenzel