The Real Deal New York

Rick Rosan’s Oak Tree Residential scores $46.5M loan to close on Brooklyn multifamily portfolio

Metropolitan Commercial Bank provided the financing for 18-building purchase
By Katherine Clarke | May 18, 2017 04:11PM

From left: 35 Devoe Street, 147 Grand Street and 244 New York Avenue in Brooklyn and Oak Tree Residential and Management’s Rick Rosan and Jere Lucey

A partnership between Rick Rosan’s Oak Tree Residential and Management and California’s Avanath Capital Management has secured a $46.5 million loan for the acquisition of an 18-building Brooklyn multifamily portfolio.

Metropolitan Commercial Bank provided the financing for the deal, which is slated to close Thursday for a total price of $76 million, or roughly $435 per square foot. The interest rate was 3.7 percent.

ZT Realty, a Brooklyn-based investment firm headed by Peter Tessler, was the seller.

Marcus & Millichap’s TRData LogoTINY Shaun Riney, Peter Von Der Ahe, Joseph Koicim, Tom Shihadeh and Dan Greenblatt represented ZT, while Cushman & Wakefield’s DJ Johnston and Stephen Palmese worked with the buyer. Andrew Dansker of Marcus secured the loan.

From left: Marcus & Millichap’s Peter Von Der Ahe, Shaun Riney, and Joseph Koicim

“The seller assembled the majority of this portfolio in the depths of the recession of 2009 to 2011 when no one was buying and financing was nearly non-existent,” Riney said, adding that the seller created value by fixing up run-down properties in prime areas of central Brooklyn.

The deal went into contract in March, The Real Deal reported.

The 174,368-square-foot portfolio comprises 207 residential units across properties at 147 Grand Street and 135 Devoe Street in Williamsburg, 267-269 Clifton Place in Bed-Stuy, and 244 New York Avenue in Crown Heights. Over 120 of those units are rent stabilized.

The current average rent per square foot collected at the properties is $29, according to the offering memorandum. By comparison, free-market rents across the portfolio range from $40 per square foot to $60 per square foot depending on the neighborhood.

Rosan, who formerly served as CEO of the nonprofit Urban Land Institute, was not immediately available for comment on his company’s plans for the buildings.

(To view more financing transactions in Brooklyn, click here)