Largest Covid-era multifamily portfolio sale closes for $200M

Josh Gotlib’s Black Spruce bought 48-building portfolio from Orbach Group

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

A portfolio of nearly 50 apartment buildings concentrated around the northern edge of Central Park has traded for about $200 million, which makes it the largest multifamily deal to close since the start of the pandemic.

Multifamily investment firm Black Spruce Management bought the buildings, comprising about 675 units on the Upper West Side and Harlem, from the Orbach Group, sources familiar with the sale told The Real Deal.

The $200 million price tag works out to about $300,000 per apartment, which sources said is a discount on what Orbach paid for the units. The New Jersey firm pieced together the portfolio in several different deals starting around the time of the Great Recession through the past few years, including some properties bought around the multifamily market’s 2015 to 2017 peak.

Negotiations started before the pandemic hit in March, but one source said the final sale price was influenced by the Covid-era market.

A representative for Black Spruce declined to comment, and a representative for the Orbach group did not immediately respond to a request for comment. Aaron Jungries of Rosewood Realty Group brokered the deal, and declined to comment.

The deal is the largest multifamily sale to close since the pandemic all but shut down the real estate industry earlier this year. It’s one of a very small handful of transactions to happen since then, giving the city’s dealmakers and investors a much-sought-after data point on how the market is valuing apartments.

The only other sale of relative scale is the contract Bruman Realty inked earlier this year to sell a portfolio of newly constructed Brooklyn apartment buildings to Dalan Management and the private equity firm KKR for several hundred million dollars.

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Sources said that portfolio is closing in separate stages; a collection of five buildings recently closed for north of $100 million. Multifamily lender Berkeley Point Capital provided $67.4 million worth of Freddie Mac loans to finance the purchase, a source familiar with the deal told TRD.

The Black Spruce-Orbach deal covers 48 buildings in approximately two clusters: one concentrated around West 109th Street near Amsterdam and Columbus avenues, and the other around West 114th Street near Manhattan Avenue and Frederick Douglass Boulevard.

The buildings are mostly small walk-ups where most of the units had been deregulated in recent years.

Black Spruce, co-founded in 2009 by former mortgage broker Josh Gotlib and his partner Oliver Legg, hammered out a deal to re-regulate the apartments and keep them affordable for 40 years through an agreement with the city’s Department of Housing Preservation and Development, a source familiar with the deal said. HPD often offers multifamily owners tax abatements to keep rents below a certain level.

The buyer assumed roughly $175 million in Signature Bank debt on the portfolio from Orbach.

Black Spruce and Orbach are two of the most active investors in the city’s multifamily space, often buying and selling their properties among a handful of familiar investors. Black Spruce bought a portfolio of Hell’s Kitchen apartment buildings from Orbach for about $110 million back in 2016, at a time when it was expanding from its roots buying properties in Brooklyn and the Bronx into Manhattan.

That same year, Orbach purchased a small group of buildings in Brooklyn from Black Spruce for $15.5 million.