Black Spruce eyes $700M+ valuation for multifamily portfolio

Josh Gotlib’s firm looks to recap “recession-proof” Manhattan collection

New York /
Apr.April 13, 2021 03:45 PM
2111 Frederick Douglass Boulevard and 214 West 109th Street, two buildings as part of the portfolio (Photos via Google Maps; StreetEasy)

2111 Frederick Douglass Boulevard and 214 West 109th Street, two buildings as part of the portfolio (Photos via Google Maps; StreetEasy)

Owners of a large multifamily portfolio in Manhattan are looking to bring on a partner who will value the “recession-proof” collection at north of $700 million.

Josh Gotlib’s Black Spruce Management is looking to recapitalize its 1,800-unit portfolio of workforce-housing buildings in Manhattan by selling a stake in the collection of buildings, according to marketing materials for the offering.

The collection of buildings is made up of five smaller portfolios mostly concentrated in Upper Manhattan, with another one around Hell’s Kitchen in Midtown.

The privately held investment firm is open to selling a stake of 49 percent to 90 percent in the entire 97-building portfolio, and is eyeing a valuation of $700 million to $750 million, according to a source familiar with the offering.

Representatives for Spruce Capital could not be immediately reached for comment. A Cushman & Wakefield team of Adam Spies, Adam Doneger, Doug Harmon and Josh King is marketing the portfolio. The brokers declined to comment.

The buildings receive a tax abatement under New York City’s Article XI program, which offers 30- to 40-year property tax exemptions for projects that are at least two-thirds affordable. The program has been an alternative to the now-defunct 421a.

The Article XI program slowed down during the pandemic, but the city’s Department of Housing Preservation and Development in February issued a new term sheet for the program, signaling that it’s a priority under the city’s affordable housing initiatives.

Demand for affordable housing far exceeds supply: The city’s housing lottery application system has received more than 25 million applications for about 40,000 units since it launched in 2013.

The marketing materials for Black Spruce’s portfolio say it has an estimated historical occupancy of about 97 percent.

Black Spruce paid $200 million last year to acquire one of the sub-portfolios around the northern edge of Central Park in November, which at the time was the largest multifamily deal to close since the start of the pandemic.





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