Black Spruce scoops up Hell’s Kitchen portfolio for $110M

14-building, 273-unit multifamily package clustered on West 49th Street

308 West 49th Street and 340 West 49th Street in Hell's Kitchen (inset from top: Meyer Orbach and Aaron Jungreis)
308 West 49th Street and 340 West 49th Street in Hell's Kitchen (inset from top: Meyer Orbach and Aaron Jungreis)

Josh Gotlib’s Black Spruce Management picked up a portfolio of 14 Hell’s Kitchen walk-up rental buildings for $110 million, sources told The Real Deal.

The properties are clustered on West 49th Street, between Eighth and Ninth avenues. They would be entirely adjacent, if not for a co-op building and the one-story home of Brazilian steakhouse Churrascaria Plataforma, which are not included in the portfolio.

The portfolio spans 136,000 square feet and contains 273 rental apartments, the majority of them market-rate. The addresses are 308-310 and 318-340 West 49th Street.

Black Spruce plans to continue operating the apartments as rentals, sources said, despite the portfolio’s potential for redevelopment.

It has about 75,000 square feet of air rights, but only about 10,000 square feet are usable given that the buildings are in the Special Clinton Zoning District.

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The seller, Orbach Group, paid $70 million for the portfolio back in 2008. In 2011, Phoenix Realty Group purchased a majority stake from Orbach for an undisclosed price.

The buildings have a capitalization rate of about 4 percent, said Rosewood Realty Group’s Aaron Jungreis, who brokered the deal. There are six retail spaces, which currently house tenants such as the classic barbershop Little Tony & Igor Be Good and pet store Spoiled Brats.

The all-cash deal closed Thursday for north of $800 per square foot, sources said.

Black Spruce, which declined to comment, also scored a $74.9 million acquisition loan from BankUnited, sources said. Meridian Capital Group’s Avi Weinstock brokered the financing.

Black Spruce, which focuses primarily on rentals in the Bronx and Brooklyn, has been increasingly expanding into Manhattan. Roughly two-dozen blocks south, the real estate investment firm closed in May on the acquisition of a 13-building, 135-unit Chelsea portfolio for $80 million.

Last year, Black Spruce was the majority buyer of Normandy Real Estate Partners and Westbrook Partners’ 42-building “Three Borough Pool” multifamily portfolio, spanning the Bronx, Brooklyn and Manhattan. The firm has since sold some of the buildings.

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