Brookfield takes second shot at selling massive Manhattan rental complex

Brookfield Properties is trying once again to sell one of its largest Manhattan apartment properties, a year and a half after its first try fell flat.

The private equity firm put the roughly 1,200-unit rental complex at 3333 Broadway in Morningside Heights on the market, eyeing a price around $350 million, sources told The Real Deal. That’s at approximately 13 percent discount from what Brookfield was looking to get 20 months ago, when it put the property up for sale with expectations it could fetch $400 million.

It’s not exactly clear why Brookfield didn’t get  a deal done the first time around, but the new pricing reflects the fact that interest rates — and buyers’ cost of capital — have gone up since then.

A spokesperson for Brookfield did not immediately respond to a request for comment. Eastdil Secured is handling the marketing for the property.

The five connected buildings at 3333 Broadway span 1,193 units — making it one of the biggest apartment complexes in Manhattan. It’s part of the former 4,000-unit Putnam Portfolio that Brookfield bought in 2014 for more than $1 billion, one of the largest apartment deals ever to trade in the city.

Brookfield and its partner Urban American sold five of those Putnam buildings to L+M Development Partners and Invesco for $1.5 billion in 2019 but held onto 3333 Broadway. 

Around the time they offered it for sale in October 2022, the owners were hammering out a new affordability agreement with the city, which owns the ground underneath the properties. 

In exchange for extending the complex’s 99-year ground lease and receiving a tax abatement, the owners agreed to turn an average of five units a year over the term of the lease into affordable units for renters earning 70 to 110 percent of the area median income.

Currently, about 97 percent of the units are free-market. About 47 percent of the free-market units are under an agreement for Section 8 housing vouchers. 

Demand for Section 8 is incredibly high: The New York City Housing Authority started accepting new applications for vouchers last week for the first time in 15 years. Since then, more than 630,000 households applied for 200,000 spots on a waiting list, Gothamist reported. 

Brookfield and Urban American recently spent about $60 million on capital improvements to 3333 Broadway, including new elevators, new windows in every apartment, new cogeneration systems and new roofs.  

The complex is similar in scale to the 1,290-unit Bronx portfolio — which, like 3333 Broadway, was a former Mitchell Lama development — that Chicago-based private-equity firm Vistria Group bought a stake in last year for $175 million. Eastdil also brokered that deal.

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