A&E, Benedict buy 10-building Queens portfolio for $133M

Mesa West, NY Community Bank provided the financing

New York /
Dec.December 08, 2016 06:22 PM

UPDATED, Dec. 9, 12:45 p.m.: A&E Real Estate Holdings and Benedict Realty Group picked up a portfolio of 10 rent-stabilized buildings across Queens from Ares Management for $133 million, or $322 per square foot, sources told The Real Deal.

The package includes 531 rental apartments and spans 403,800 square feet. The properties are largely concentrated in the working-class neighborhoods of Elmhurst, Woodside, Jackson Heights and Sunnyside. One building, the 34-unit property at 38-05 Crescent Street, is in Long Island City.

The other addresses are 93-35 Lamont Avenue, 32-15 and 32-25 93rd Street, 38-05 Crescent Street, 143-45 Sanford Avenue, 41-46 50th Street, 39-25 65th Street, 39-89 50th Street and 41-45 52nd Street.

The deal closed Thursday for about $245,000 per unit.

The buyers are planning a long-term hold of the properties. They also secured a $75 million acquisition loan Thursday, with Mesa West Capital financing part of the package and New York Community Bank financing the rest, sources said.

Rosewood Realty Group’s Aaron Jungreis, who brokered the deal, declined to comment, as did A&E.

AREA Property Partners and Vantage Properties, two large private-equity shops that went on a rent-regulated shopping spree in the mid-2000s, bought the 10 buildings as part of a 47-building, $300 million portfolio in 2008. In 2011, AREA bought Vantage out of its stake in their total of 80 Queens buildings, which were then valued at $540 million. In 2013, Los Angeles-based Ares Management acquired AREA Property Partners.

A&E has already taken a bite out of Ares’ Queens holdings in the past. In late 2013, A&E paid north of $300 million for 29 buildings.

Funds managed by Ares, a publicly-traded global alternative asset manager, still makes acquisitions in the city these days. In July, the firm partnered with Normandy Real Estate Partners to buy a Greenwich Village office building at 797-799 Broadway for $101 million.

The Queens deal is the first time A&E and Daniel Benedict’s Great Neck-based Benedict Realty Group have partnered. Benedict picked up two Kew Gardens rental buildings for $53.5 million earlier this year.

In addition to the Queens portfolio, A&E, led by Douglas Eisenberg and John Arrillaga Jr., is looking to add another 1,000-plus apartments to its holdings. The Midtown-based investment firm is in contract to buy five Brooklyn buildings for $89 million and is in talks for the late landlord Harry Silverstein’s more than 800-unit portfolio for $275 million. Since forming in 2011, A&E has acquired more than 100 buildings and more than 8,800 apartments.


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