Rent-regulated Rego Park building sells for $48M
Buyer paid $153K per unit for six-story property
A fully rent-stabilized building in Queens’ Rego Park neighborhood traded hands for $48 million, providing another important data point for an asset class often described as troubled.
The 312-unit Fannwood Estates was sold for about $153,000 per unit, brokerage Marcus & Millichap announced. The six-story property is at 99-19 66th Road, across the street from the Long Island Jewish Medical Center.
The buyer and seller were not disclosed. The most recent owner, Fannwood Estates LLC, is linked with New Hyde Park-based Ditmas Management, which Commercial Observer reported is owned by the Goldberg family. Ditmas did not return a call from The Real Deal.
The transaction announcement describes the buyer and seller as private investors. Andrew Goldberg signed closing documents for the seller. Marcus & Millichap brokers including Shaun Riney and Seth Glasser represented the seller and procured the buyer.
The price per unit reflects the building’s relatively high regulated rents and good condition. The property has no housing violations and 183,000 square feet of unused air rights.
Rents at the building appear to range from $1,600 to $2,500, depending on the unit size. The most recent lease on StreetEasy was $1,675 for a studio apartment.
Changes to the rent law in 2019 severely limited rent increases in rent-stabilized buildings. Net operating income has since plummeted, falling 9.1 percent in 2021 alone — the steepest annual decline since the Rent Guidelines Board started its tracking of the metric in 1990.
The previous sale of what is now Fannwood Estates, a multigenerational asset, appears to have been too long ago to show the effects of the 2019 law on its value. It had belonged to the estate of Leonie K. Guinzburg, who died in 1955. A one-paragraph obituary in the Daily News identifies her as director of the Federation of Jewish Philanthropies and United Neighborhood Houses.
A few months ago, Barberry Rose Management sold 16 rent-stabilized buildings for $47 million. Barberry Rose took a 44 percent discount on the sale from what it paid to acquire the rent-stabilized portfolio in 2016.
Another mostly rent-stabilized building in good condition, 62-unit 788 Riverside Drive, sold last month for $10.2 million, or $165,000 per apartment. The deal worked out to $125 per square foot.