The Real Deal New York

Months after his death, Harry Silverstein’s estate beginning to sell portfolio

Pistilli, Justin Lee in contract on two Bronx rentals in separate deals totaling $45M
By Mark Maurer | July 03, 2017 01:55PM

1555 Grand Concourse and Joe Pistilli

The family of late landlord Harry Silverstein is in contract to sell a pair of rent-stabilized rental buildings in the Bronx to two different buyers for a combined $45 million, sources told The Real Deal.

In two pending deals, Pistilli Realty Group is buying a 149-unit, 139,000-square-foot building at 1555 Grand Concourse for nearly $30 million and investor Justin Lee is buying a 67-unit, 65,000-square-foot property at 3971 Gouverneur Avenue for about $15 million, sources said.

The deal for 1555 Grand Concourse would mark the first sale of one of the larger buildings in Silverstein’s multifamily portfolio since his death late last year. The family of the Mill Basin-based landlord looked to sell all 14 buildings – a portfolio of more than 800 apartments in Brooklyn, Queens and the Bronx amassed as early as the 1960s.

After negotiations to sell them all to multifamily giant A&E Real Estate Holdings for $275 million earlier this year stalled, the family opted to part ways with the portfolio in a series of one-off, off-market deals, sources said. A&E remains in talks for some of the buildings, sources added.

Meridian Capital Group’s Mark Steinmetz and Richard Velotta are representing the seller in the Grand Concourse deal, and Rosewood Realty Group’s Aaron Jungreis is representing the seller in the Gouverneur Avenue deal. The brokers and Silverstein could not be reached for comment.

The deals would pencil out to roughly $215 and $230 per square foot, respectively.

Pistilli, a family-run firm active in the Bronx multifamily market, is set to close later this month on its purchase. It’s not clear when Lee is set to close.

“We decided to be very aggressive in the Bronx because there’s a future there,” said Joseph Pistilli. “Hopefully rents will continue to climb.”

As TRD reported in May, much of the multifamily investment in the Bronx this cycle has been speculative. In half of buildings sold between 2009 and 2016, market prices grew at least three times faster than building net income.

The two buildings would not be the first to trade since the landlord’s death. His son Eric Silverstein, who now controls the properties, sold a 46-unit building in Prospect-Lefferts Gardens in March to Eric Miller, son of the late landlord Bernard Miller, and Jonathan Weinberger for $10.5 million.

Sources said prospective buyers have been touring the buildings, though the other properties are not yet in contract.

Whoever takes on Silverstein’s properties will likely encounter myriad violations and other problems. In 2016, he ranked at the top of the New York City Public Advocate’s annual worst landlords list with over 2,000 violations on eight of his buildings. He took the No. 2 spot in 2015. The list, much criticized by the real estate community, ranks 100 landlords by the number of outstanding violations they have with city agencies.

His remaining 11 buildings include 91-35 193rd Street, 87-40 165th Street and 39-30 59th Street in Queens; 605 East 16th Street, 535 East 21st Street, 488 Rockaway Parkway, 429 Mayfair Drive South, 261 Lenox Road, 250 Parkville Avenue, 2005 Albemarle Road and 141 Lenox Road in Brooklyn, property records show.

Pistilli is developing a 30-unit rental building on Kingsbridge Terrace in the Bronx and recently bought a six-building, 209-unit package in the borough from Isaac Kassirer for $38.5 million.