Spencer Equity Acquires Brooklyn Section 8 Building for $50M
The 250-unit property in Coney Island was sold by the Orbach Group in a transaction arranged by Rosewood Realty Group.
A 20-story, 250-unit rental building in Coney Island, Brooklyn, that has a long-term contract as part of the federal government’s Section 8 Housing program has changed hands for $50 million.
Spencer Equity, run by Chairman & President Joel Gluck, acquired the 229,865-square-foot building at 2911 W. 36th St. from the Orbach Group, a New Jersey-based real estate investment firm run by Meyer Orbach. The Orbach Group purchased the building in 2014, which also contains five retail units, for $34 million.
Rosewood Realty Group’s Aaron Jungreis represented both the buyer and the seller. The sale was the 18th building transaction that Rosewood has handled for the Orbach Group, a privately held company that owns approximately 5,000 apartment units in New York, New Jersey, Pennsylvania, Virginia and California.
“This is a great purchase for Spencer Equity. This Brooklyn neighborhood is on the rise with a great location near the ocean and many new buildings going up in the area,” Jungreis said in a prepared statement.
Coney Island Developments
The building is located near Ocean Dreams, the $300 million mixed-use development by John Catsimatidis’ Red Apple Group. The 21-story, 425-unit property at 3514 Surf Ave. will feature a grocery store and drug store and is slated for completion in 2019.
In late May, Cammeby’s, a privately held real estate company, opened a new flood-resistant, seven-story, 161,000-square-foot mixed-use building with office and retail space at 626 Sheepshead Bay Road. The structure is part of the $300 million Neptune/Sixth project that will also feature more retail and apartments in a nearby 42-story tower.
Gluck, a big investor and developer in Brooklyn, may also have been attracted by the 20-year contract with the Department of Housing and Urban Development for Section 8 Housing at the property which remains in place until 2034. The acquisition had to be approved by HUD and the New York City Department of Housing Preservation and Development.
Gluck has also recently partnered with Simon Dushinsky’s Rabsky Group on a 1.1 million-square-foot housing community in the Brooklyn Triangle, an area where the Williamsburg, Bedford-Stuyvesant and Bushwick neighborhoods meet, and a 36-story commercial building at 624 Fulton St.
In November, Gluck secured $69 million to refinance Noonan Plaza, a seven-story, 238-unit apartment building in the Highbridge section of the Bronx, according to a Rosewood Realty spokesperson. Spencer Equity has owned since October 2016 when it paid $38.4 million for the 335,000-square-foot property which also has 5,000 square feet of retail space. That transaction was one of the top 10 multifamily deals in New York City for the fourth quarter for 2016, according to PropertyShark.
NYC Multifamily Market Up
The firm’s activity comes as New York City’s multifamily market performance improved during the first of 2018 compared to the same time in 2017 with dollar volume more than doubling to $5.3 billion, according to the Ariel Property Advisors Multifamily Quarter in Review: New York City | Q2 2018 report. Brooklyn, due to the sale of Starrett City portfolio for $904.6 million, led in dollar volume and pulled the entire multifamily market up with that transaction—the largest sale so far this year in New York City, the report noted. Overall, for the first half of 2018, Brooklyn saw $2.12 billion in dollar volume from 83 transactions involving 145 buildings.