Brookfield lends on Kassirer’s $358M “Dawnay Day” purchase

Emerald Equity chief closes on acquisition of 47-building Harlem rental portfolio

TRD New York /
Dec.December 16, 2016 04:00 PM

“Neither a borrower nor a lender be,” Polonius famously counsels his son Laertes in “Hamlet.” Brookfield Asset Management usually follows that advice when it comes to multifamily deals, but decided to make an exception for the “Dawnay Day” portfolio.

Brookfield TRData LogoTINY loaned Isaac Kassirer’s Emerald Equity Group about $300 million to help him close on the 47-building portfolio Friday, sources told The Real Deal. The package, which Kassirer bought for $357.5 million, is one of the largest multifamily deals of the year.

In May, Fairstead Capital and Galil Management, an affiliate of E+M Associates, entered contract to sell the formerly distressed package of 1,130 rental apartments and 51 commercial units in East Harlem to Kassirer. The 712,570-square-foot portfolio, which is largely rent-stabilized, was named after now-defunct investment firm Dawnay Day, which owned it for two years until the company fell into foreclosure in 2009.

Kassirer is planning a long-term hold of the buildings, sources said. Addresses include 291 Pleasant Avenue, 1567 Lexington Avenue, 112-116 East 103rd Street and 233 East 111th Street.

The deal closed for roughly $500 per square foot and $315,000 per unit. A series of delays pushed the closing back from its initial expected date in August.

But Kassirer ultimately secured acquisition financing from Brookfield through its real estate finance funds. The loan consists of $275 million up front and $25 million down the road, sources said. Brookfield is said to be ramping up its lending activity in the city.

Harlem landlord Steven Kessner gathered the buildings over several years dating back to the 1980s. He sold them to U.K.-based Dawnay Day in 2007 for $225 million, which debuted in the U.S. real estate market with that deal. It pursued widespread rent hikes after tenants in the rent-stabilized units had been displaced.

C-III Capital Partners, a special servicer, moved to foreclose on the building in 2009 as the market crashed. Amid a mortgage workout, Fairstead, then known as SG2 Properties, and Galil paid $130 million to pull it out of foreclosure, sources said.

Ariel Property Advisors’ Shimon Shkury and Victor Sozio represented the sellers, while Westwood Realty Associates’ Steven Vegh represented the buyer. Meridian Capital Group’s Marvin Jeremias, Ronnie Levine and Drew Anderman brokered the financing.

Kassirer confirmed Vegh represented him, but declined to comment further. The sellers also declined to speak. Brookfield could not be immediately reached.

Kassirer is fast becoming a major player in the multifamily market, particularly in the Bronx and Brooklyn. He and his partners bought a 38-building Bronx portfolio for $140 million earlier this year. Kassirer was also among the buyers of a 13-building, $90 million Bronx package last year.

The largest closed multifamily deal of the year so far is Kips Bay Court, an eight-building complex that Blackstone Group recently bought for $620 million.

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