The Real Deal New York

Slate, Madison asking $120M for expanded Kips Bay portfolio

Partners add four buildings to package they listed in October for $57M
By Rich Bockmann | January 10, 2018 02:15PM

Josh Zegen, David Schwartz and 489, 493 and 495 Third Avenue

Slate Property Group and Madison Realty Capital expanded their offering of Kips Bay buildings they put on the market last year to a portfolio now asking nearly $120 million.

A joint venture between the two firms in October listed for sale three mixed-use multifamily buildings at the corner of Third Avenue and East 33rd Street: 489, 493 and 495 Third Avenue.

The properties, which contain 43 rental apartments, were asking $57 million.

Now Slate and Madison are adding four other adjacent buildings: 203, 205, 207 and 211 East 33rd Street. The listing now totals 147 apartments, seven retail spaces and one roof antenna spanning a little more than 93,000 square feet. The asking price is $119.85 million, which works out to a cap rate of 4.6 percent.

“We’re offering it as one big portfolio, but that doesn’t mean some buyers can’t come in and by some of the buildings in a cluster, said Marcus & Millichap’s Joe Koicim, who is marketing the portfolio with his colleagues Peter Von Der Ahe, David Lloyd and Corey Isdaner. “This is attractive considering the cap rate, the location and the way they repositioned the asset. There’s still upside in the rents.”

From left: Peter Von Der Ahe, Joe Koicim, David Lloyd and Corey Isdaner

Silverstone Property Group, which became the property management arm of Madison Realty in 2009 when co-founder Martin Nussbaum left to start Slate with partner David Schwartz, bought the portfolio in 2013 for $71.5 million.

The owners combined the buildings into a mini-campus they dubbed “The Collective,” where tenants across all seven properties could take advantage of the part-time doorman at 207 East 33rd Street, as well as services like a package drop-off.

Out of the 147 residential units, 13 are rent stabilized and 14 are under rent control, leaving 82 percent of the apartments fair market. Koicim said there’s upside in bringing some of the fair-market units up to market rate.