Monday, February 4, 2013

More about last week's 17-building deal


On Friday afternoon, The Real Deal first reported that developer (and New York Observer publisher) Jared Kushner closed on a portfolio of 17 walk-up apartment buildings in the East Village for some $130 million.

There were slightly different accounts of the addresses in the article in The Real Deal and the Post.

The Real Deal:

201 East 2nd Street, 23 Avenue A, 129 First Avenue, 143 First Avenue, 338-340 East 11th Street, 165-167 Avenue A, 500 East 11th Street, 504 East 12th Street, 191-193 Avenue A, 435 East 12th Street, 516 East 13th Street, 211 Avenue A and 49 and 1/2 First Avenue.


The Post:

165-167 Ave. A, 129 1st Ave., 143 1st Ave., 191-193 Ave. A, 201 East 2nd, 211 Ave. A, 23 Ave. A, 338-340 E. 11th St., 435 E. 12th St., 500 E. 11th St., 504-508 E. 12th St. and 516-518 E. 13th St.

Can any residents of 49 1/2 confirm that their building was part of the sale?

In any event, Kushner's affiliate, Westminster Management, has taken over the, uh, management of the buildings.

Per the Westminster website:

Westminster Management, a division of Kushner Companies, is a diversified real estate organization headquartered in New York City with regional offices in New Jersey, Maryland and Ohio. Our company is responsible for the ownership, management, development and redevelopment of countless properties. Our national reach consists of more than 15,000 multifamily apartments and we plan to continue to make acquisitions as the market presents opportunities.

One resident sent along this note that was slipped under his or her door on Friday...


And said another building resident:

The first communication from them is promising. PVE wouldn't even give out an address, so now we have a landlord with a name, address and an Internet portal, which is 3 more things than we had before.

Ben Shaoul's Magnum Real Estate (Westbrook Partners, Meadow Partners, PVE Associates and Fortune East LLC, et al) reportedly previously managed the the properties.

One possibly interesting development: The deal included 500 E. 11th Street, site of the incoming 7-Eleven... the one that apparently no one wants... and whose opposition has received global news coverage...

Have other tips or photos about the situation here? Please send them our way via the EV Grieve email

16 comments:

Drew Bushong said...

Bought ours too at 99 east 7th.. Can't imagine they're worse than our previous landlords but ...

Anonymous said...

WE NOW HAVE AN INTERNET PORTAL?!!? UPGRADE!

Kirsten Levy said...

Confirming: 49 1/2 First Avenue was part of the deal.

Anonymous said...

Can someone who knows more about real estate than I do analyze what this means? What do you think the plan is here? Are they going to wait for rent stabilization to end and then jack up all the rents to force people out, tear down the buildings and build luxury condos? I can't imagine these guys would be satisfied owning a bunch of tenement buildings in the East Village. I am nervous because I live near the 504-508 East 12th Street building.

Anonymous said...

Re: Are they going to wait for rent stabilization to end and then jack up all the rents to force people out

They don't have to wait for it to end to begin harassing you. But I think you have the right idea ... I'm not sure how an end to rent stabilization would come into being ... I imagine it would at least grandfather those already covered, but could imagine loopholes to force people out, e.g. if there were fewer than x tenants in a building ... They have money to burn and / or see the property as a good investment.

Jill said...

These buildings are cash flow gold and their value has only gone up over time. From things I've read, it seems that cash flow from rentals is key for developers to finance their other more fancy condo, mall and hotel projects.

For the state to remove rent regulations suddenly would be astonishing. It's been a gradual deterioration over the years, the result being so many tenants with few rights and little reason to feel invested in their neighborhoods as the Kings of the Land(lords) dominate so many aspects of our lives.

If you are truly interested in rent regulations visit tenant.net - they have a lot of good information, mostly in the forums, some of the rest of it is old.

Shaoul's minions managed to get most of the regulated tenants out that they could. Those that are left are legally living in their apartments, know their rights and aren't going anywhere until they are ready, so that tactic doesn't seem to make sense for profitability in any kind of big numbers. When Westbrook bought the buildings we heard they promised their investors a 30% return in 3 years. This was based on increasing the rents by getting regulated tenants out, and then the increased value of the properties that higher rent rolls bring.

Tearing down all the buildings and making condos? It's possible perhaps for some of the buildings, but also seems like there are better ways to go about that than buying random groups of buildings on side streets where you can't build very high.The value of these buildings in the last 3 sales has been that they are grouped together and that seems to be an attractive thing to the buyers, as they haven't been split apart so I would guess there is something about keeping them together as a group that makes financial sense.

Anonymous who lives near 504/508 - you are nervous because you live NEARBY? I'm not sure I understand that. Hopefully you are concerned for the tenants and not because you are afraid there will be construction on your block. If you are worried about being inconvenienced, you are ok, you will be long gone by the time they get the authority to evict 100 people and tear the building down.

Anonymous said...

I should clarify that I didn't mean to say I thought rent stabilization was going to come to an end. I meant to say are they going to wait for the rent stabilized apartments to reach the threshold where they aren't rent stabilized anymore and then jack up the rents.

Anonymous said...

Also, I am not worried about construction because I live near 504-508, I am worried about my building being bought, too. It is probably inevitable, though.

Anonymous said...

So much for the new management. Residents of 167 and 165 Avenue A came home from work tonight only to find the electronic key system not working so they were locked out of their buildings. Tenants were standing in front in the freezing cold. Noone answers the phone at the management office and calls to the super yielded "there is nothing I can do - I will call the management office to send someone tomorrow." Residents took matters into their own hands and someone was able to get inside the building threw the roof and let other residents in.

Anonymous said...

That pesky rent stabilization is guaranteed to go quietly away as long as you shut up and do as you're told. Move in, pay what they tell you, do not ask questions, do not call for your rent history (718 739 6400), do not challenge strange charges, and above all: TRUST YOUR LANDLORD! THERE IS NO WAY THAT THEY WOULD EVER LIE OR CHEAT YOU!

Jill said...

I was so hopeful because of the internet portal and a guy named James but James doesn't answer his phone all day or return a call, so my hopes have been dashed.

To the anonymous confused 12th street resident -- nobody is waiting for the rent regulated tenants to leave, they have been harassed out via a variety of tactics just this side of the law and then raising the rents in those units over the past decade or more. this is not news and does not affect you or your rent in any way. Rent regulations are based on the specific unit and its history, not a building as a whole.

If you are concerned about living here long term, I encourage you to get involved in the community and work toward reinstating rent regulations so that you can feel safe and invested in the place you call home. It is a terrible shame on our city that renters are no longer protected from predatory landlords, and for that, you are right to be worried.

Anonymous said...

My rent-stabilized renewal lease packet from Westminster came. The cover letter requested the tenant to sign and return ONE (not two as required by law) copy of the lease to owner. That's a well-known ruse to leave the tenant holding a lease copy that's not been signed by the owner. My "Introducing Westminster" letter also included a separate legal notice with a different addressee to send the rent to (so no matter who I send it to, they can say my payment's invalid because sent to the wrong entity--even though both are in the same office). Exact same textbook bad-landlord tactics PVE/Magnum tried.

Anonymous said...

I live in 435 E 9th and Westminster bought my building around September. We were given the same letter, but never told our new supers name or phone number. The company lists our former super on their website. I called him once and ended up in a Westminster bashing session, because he said he has not been paid for the few months he worked for them.

Mid-December, our building didn't have heat or hot water for a full week. It started on a Thursday, and we had a hand-written note taped up saying the boiler broke and they'd "try to have it fixed tomorrow" and if not, then it would be Monday. It was Tuesday before we saw anybody and Friday before it was fixed.

I've written maintenance requests on the "internet portal," and, each time, it disappears and there is no record or response to acknowledge the request was ever there. And don't pay your rent via credit card on the website -- there's a $50+ service charge. The e-check option is free, however.

12:42 pm said...

Need not forget that Kushner was also a bidder for Stuyvesant Town and Peter Cooper Village that was eventually won, and failed, by Tishman Speyer. And much like what Tishman tried to do with ST and PCV, JK will deregulate the units --and succeed at it, learning from Tishman's mistakes and greed -- to turn them into postgrad-playpens. They all travel in the same circles.

Jill said...

But in the end didn't they put all those stuy town apartments back into regulation, lower the rents, and give the tenants giant rebates? Plus, they have different issues in that the status that kept stuy town regulated based on being middle income expired, creating all the havoc/opportunity for gauging. I think that is a different ball game.

One thing alarming is one quote by Kushner says that they plan to do "major capital improvements" which is something Shaoul did not do on a widespread basis, and if they lie about the costs well enough for boilers, electricity, roofs and plumbing, they can get an additional 6% rent hike from all regulated tenants.

Jill said...

Also 12:42 as I've said before, turning these apartments into student housing has already been done by shaoul. this isn't new for these buildings. Shaoul and his minions were bulldogs in getting people out so they could cheaply renovate, lie about the renovation costs, get market rate and trust (rightly) that these students wouldn't bother to question their rent or care that they had rights. I spoke to some of these kids who moved into apartments that were formerly $200 rent and explained about getting their rent history etc, they didnt give a shit. Their tactics were shameless and persistent.