New REIT to focus on Manhattan condos

NY Residential REIT is targeting online investors to raise $50M
May 05, 2017 10:55AM

Jesse Stein

A brand new real estate investment trust has just set up shop, and it’s looking to capitalize on New York City’s steady supply of luxury apartments.

NY Residential REIT is trying to raise $50 million from online investors, Bloomberg reported. It currently has no assets, pursuing investors on the basis that its management team will buy property once it has access to funds. It will be targeting new development units coming to market.

The REIT — which counts celebrity broker Ryan Serhant as an adviser — plans to buy places to be rented out for income, and will look for small multifamily properties, single-family homes, condominiums and distressed assets, the SEC filing shows.

Changes to SEC rules in the last five years made it easier for the REIT to get started. The 2012 JOBS Act changed the rules to make simpler for small businesses to advertise and seek funds from a bigger collection of investors. Since 2015, the SEC has allowed startups to raise up to $50 million in a one-year period.

“Manhattan is one of the most sought after real estate markets in the world, but 99 percent of people can’t really participate,” said Jesse Stein, the chief executive officer of Commencement Capital LLC, the company created to manage and operate NY Residential REIT, according to Bloomberg. “Unless you’re a multimillionaire or unless you’re an institution, you probably don’t have the means to buy property for investment.”
However, Trump’s plan to bring corporate tax rate down to 15 percent may turn REITs into a less attractive investment option than they’ve been in the past. In March, The Real Deal ranked the major shareholders of the city’s REITs. [Bloomberg]Miriam Hall