HUBB NYC picks up Williamsburg rental for $78M

Investor continues to buy 421a buildings after program expires

HUBB NYC’s Jesse Terry with 150 Union Avenue
HUBB NYC’s Jesse Terry with 150 Union Avenue (LinkedIn, Street Easy, Getty)

With the expiration of 421a, buildings with the coveted tax exemption will be harder for future investors to come by. And development of apartment buildings is expected to slow, boosting competition for existing ones.

HUBB NYC continues to snap up the tax-favorable properties. The investment firm just paid $76.8 million to buy a 130-unit rental building at 150 Union Avenue in Williamsburg.

The seller, Adam America Real Estate, developed the building with 421a in 2015. The program abates property taxes for up to 35 years.

HUBB NYC chief investment officer Jesse Terry wrote in an email that the combination of rising interest rates and the 2019 rent law changes has “made 421a buildings very difficult to buy.”

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A JLL team led by Bob Knakal brokered the sale.

The deal for 150 Union is the latest in a string of 421a buildings HUBB NYC has scooped up.

In May, the company bought a 78-unit rental building at 167-171 Chrystie Street on the Lower East Side for $64 million. And last year the company paid $105 million to buy a 141-unit building at 56 West 125th Street in Harlem.

The most recent iteration of 421a, Affordable New York, expired in June. The last time the program expired, in 2015, it took lawmakers more than a year to come up with a replacement as developers and construction unions squabbled about wage requirements for 421a projects.

This time around, there is uncertainty that lawmakers will ever reinstate the program, as progressives have deemed its tax breaks too great to justify the affordable housing it creates.