The Real Deal New York

Fairstead picks up 42-building Sunset Park portfolio

Firm struck deal with city to keep the 403 units affordable for 30 years
By Mark Maurer | June 16, 2017 06:10PM

From left: 517 49th Street and 565 56th Street in Sunset Park (inset: Stephen Siegel) 

Fairstead Capital picked up a 42-building affordable housing portfolio in Sunset Park from Irving Langer’s E&M Associates, the firm told The Real Deal.

The portfolio holds 403 Section 8 apartments in four housing complexes in the Brooklyn neighborhood. The price was not immediately clear, but sources active in the neighborhood said they are collectively worth somewhere north of $100 million.

As part of the deal, Fairstead struck new regulatory agreements with the New York City Department of Housing Preservation and Development to keep all of the units affordable for the next 30 years, the firm said. Fairstead plans to make extensive capital improvements, including upgrading the common areas and energy systems and making in-unit repairs.

In a statement, a Fairstead representative said, “The purchase represents Fairstead’s continued support for New York City affordable housing and long-term belief in the Brooklyn market.” The firm declined to comment on the price.

Property records show E&M has owned the buildings since 1982, under the entities of Neighborhood Stabilization Associates I and II.

In 2015, E&M opted to renew the complexes’ contracts with the Section 8 program for another five years, following an outcry from tenants over a warning notice saying the landlord did not intend to renew.

Addresses include 438, 441-445, 517 and 549 49th Street; 448 and 523 51st Street; 334 and 574 53rd Street; 224 54th Street; 364-370 55th Street; 565 56th Street; 4702-4704, 5500 and 5609 Fourth Avenue; and 4920-4922, 5203-5213, 5302-5310, 5319-5323 and 5301-5311 Sixth Avenue.

A representative for E&M could not be immediately reached. The deal was done without brokers, sources said.

The multifamily package is one of the largest packages to trade so far this year. Oak Tree Residential and Management and Avanath Capital Management closed last month on the purchase of 18 Brooklyn buildings for $76 million. Meanwhile, Silvershore Properties is trying to sell 57 of its buildings, some of which are in Sunset Park.

Fairstead and E&M are two of the city’s most active multifamily investors. They’ve partnered in the past on properties including the 47-building Dawnay Day portfolio in East Harlem. Fairstead and E&M affiliate Galil Management sold those buildings to Isaac Kassirer’s Emerald Equities last year for $357.5 million.

Fairstead, led by CBRE brokers Stephen Siegel and Andrew Goldberg and partners Jeff Goldberg and Will Blodgett, owns more than 6,000 apartments in the city. The firm’s holdings include the Caiola portfolio, which it purchased with Blackstone Group for $690 million in 2015, and Savoy Park, which it bought for $315 million last year.