Fairstead puts Harlem affordable complex on market

Developer expecting $400M bids for Savoy Park

Fairstead's Jeffrey Goldberg with Savoy Park (Fairstead)
Fairstead's Jeffrey Goldberg with Savoy Park (Fairstead)

Fairstead is looking to turn a hefty profit on its Harlem affordable housing complex six years after purchasing the property.

The developer has put Savoy Park in Central Harlem on the market, Bisnow reported. Fairstead, which co-owns the seven-building complex with Artemis Real Estate Partners and C-III Capital Partners, is expecting bids of at least $400 million for the complex formerly known as Delano Village.

Green Street was first to report the marketing, which is being handled by Cushman & Wakefield.

Fairstead purchased the 1,802-unit complex in 2016 for $315 million, later adding Artemis and C-III to the ownership team. An investor group including L&M Development Partners and Savanna were the sellers in that transaction.

The complex is 93 percent leased. If the owners fetch a price of $400 million, that would represent a value of $223,000 per unit. The owners are banking on the $18 million spent on upgrades, including LED lighting and more efficient appliances.

All of the units in the complex are designated as affordable, reserved for those making between 80 percent and 150 percent of the area median income. The units must remain affordable under an agreement with the city.

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The complex could be a target for developers looking to expand upon the 13-acre site. According to current ownership, a new owner could sell as much as 337,000 square feet of air rights. It would also have the right to apply for another 1 million square feet of air rights.

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The developer is informing bidders that an amendment has been negotiated to allow for one-bedroom units to be divided into studios, according to Green Street, which could add another 600 units to the complex.

Fairstead did not immediately respond to a request for comment.

Fairstead late last year plunked down more than $350 million in partnership with Invesco Real Estate for a portfolio of 48 Bronx buildings totaling 2.3 million square feet across almost 2,000 apartments. Property Resources Corp. was the seller of the affordable portfolio.

The deal was on trend with the developer’s view of the market, as Fairstead CEO Jeffrey Goldberg told The Real Deal last month, “affordable housing is such an in-vogue area of real estate right now.”

[Bisnow] — Holden Walter-Warner