Long Island City building fetches $47M in wake of rent law
Market-rate status even more enticing now, seller’s broker says
A sign of life has just flashed across New York City’s multifamily market.
Sales have come to a virtual halt since New York drastically tightened its rent law in June, but Arik Lifshitz’s DSA Property Group is purchasing a 115-unit rental building at 29-28 41st Avenue in Long Island City for $47 million, according to sources familiar with the deal.
The units are market-rate and largely exempt from the new limits on rent increases.
“The appetite for free-market multifamily assets is stronger now due to the change in rent laws,” said broker Jonathan Shainberg, a member of the Meridian Capital team representing the seller, in a statement. “One of the most attractive features of the deal is the ability to buy in above a 5 percent cap rate and still be able to raise existing rents 15 to 20 percent.”
Lifshitz bought the building from Jack Guttman, who had acquired it in 2010 for $12.75 million.
Guttman converted the property from an office building to residential in 2015. It is 12 stories tall and spans 96,450 square feet.
The Meridian Capital team on the sale side also included Amit Doshi and Shallini Mehra. Another Meridian team — David Schechtman, Abie Kassin and Adan Elias Kornfeld — represented Lifshitz.
Avi Weinstock and Josh Rhine of Meridian arranged for a $31.5 million acquisition loan on the deal from Signature Bank.
Amenities in the building include a gym, a movie room and a tenant lounge with televisions, ping-pong and poker tables. The property is also home to Green Desk, a flexible office-space tenant using 7,600 square feet on the ground floor.
Guttman could not be reached for comment.
“Our team is very excited to invest in Long Island City and enjoy all the merits the neighborhood has to offer,” Lifshitz said in a statement.
His company parted with one of its buildings earlier this year at 106 Fulton Street in the Financial District, which Thurcon Construction and Development bought for $77.5 million. Lifshitz told The Real Deal at the time that his company does not usually sell buildings, but the offer for that one was unsolicited and too good to pass up.
The Queens multifamily market is typically slow, but the borough saw some major properties change hands just before the rent law was overhauled. Among them were Zara Realty’s purchase of a pair of multifamily buildings in Flushing for $80 million and HUBB NYC’s acquisition of 31-57 31st Street in Long Island City for $75 million.