Related Companies is taking a hit on a modest Prospect Heights rental portfolio and increased rent regulations may be to blame.
Related Fund Management sold the four Brooklyn buildings at 315, 319, 323 and 329 Lincoln Place for a combined $16 million, Crain’s reported. The buyer was Great Neck-based ABJ Properties, run by Benjamin Soleimani.
The 48-unit deal — which comes out to $333,333 per unit — is a steep loss compared to the $30 million Related put down in 2016 to purchase the portfolio from BCB Property Management; it used a $17 million loan from the now-defunct Signature Bank. Related later renovated all of the five-floor properties.
An issue for Related, however, is that a portion of the units are occupied by rent-stabilized tenants. That may not have been top of mind for the company in 2016, but the state revamped rent regulations in favor of tenants in 2019, increasing the difficulty of deregulation and raising rents for those units. Owners of rent-stabilized units have been feeling the pinch ever since.
Related has filed more than a dozen lawsuits against tenants across the portfolio for nonpayment of rent. Several of those cases remain open, according to court records.
Related declined to comment on the sale, while ABJ did not immediately return the publication’s request for comment.
Elsewhere in Brooklyn, Related joined forces with Fortress Investment Group and the U.S. Immigration Fund to develop the remainder of the beleaguered Pacific Park megaproject after Fortress and USIF foreclose on Greenland USA. Latest estimations pin a completion date more than a decade into the future.
Read more
Popular
New York
Related buys four-building BK portfolio for $30M
Development
New York
Related, Fortress, USIF to develop Pacific Park as joint venture
Commercial
New York
Steve Croman, in rare sale, cashes in on hot multifamily market
Soleimani’s ABJ appears to have been relatively quiet in recent years. In 2022, it was the majority buyer in a $61 million deal for seven walk-ups in the East Village and one in the Lower East Side; Steve Croman was the seller in that transaction.