North Point Management, a multifamily investment group, acquired a 150-unit apartment building in the Hudson Valley for $19 million from Tower Management Service.
Tower had purchased the Crestwood Apartments at 92 Fitzgerald Drive in Middletown, New York, in late 2015. The building was most recently valued at $7.8 million, according to data from PropertyShark.
The deal marks North Point’s second Middletown acquisition in the past year. In July, the firm snapped up a 112-unit multifamily property at 51-95 and 97-127 High Barney Road for just over $10 million.
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The latest transaction reflects sustained demand for multifamily dwellings outside of the highly regulated New York City and New Jersey markets, said Janet Bortz, senior vice president of the Kislak Company, which arranged the sale.
“The Hudson Valley market has no rent control, high demand for rental units and continued migration of tenants from higher-cost rental markets,” she said in a statement. Low interest rates have also buoyed demand.
New York’s 2019 rent law overhaul led multifamily owners to eye upstate markets, where the potential for rent increases provides more upside.
E&M Management, known for flipping rent-regulated buildings to market-rate — a model rendered obsolete by the new law — pioneered the exodus. In 2018, the firm offloaded dozens of city properties and made an aggressive push into the Hudson Valley.
Other firms followed, with Related Companies, Fairstead Capital, Centurion Real Estate Partners and Carnegie Management all acquiring upstate real estate.
The pandemic has also increased demand for suburban housing, as city dwellers sought more space upstate. That helped push up prices in the Hudson Valley.
One cloud for landlords in unregulated New York markets, though, is the good cause eviction bill. The legislation would ban evictions for nonpayment in cases where the landlord raises rents by more than 3 percent, creating a de facto statewide rent control that would devalue buildings like Crestwood.
The bill was referred to the New York Assembly Housing Committee in February and is not expected to pass before this year’s legislative session ends June 10.