Could this be the litmus test for the multifamily market in a Democratic-controlled Albany? A family with a portfolio of Rego Park apartment buildings is testing investor interest for rent-regulated apartments as state lawmakers weigh reforms.
The Kestenbaum family — which has owned 18 adjacent
properties along Queens Boulevard for the past 75 years — has hired Paul
Massey’s B6 Real Estate Advisors to market and sell the package. The buildings
have 539 apartments, all of which are rent-regulated, Crain’s reported.
The asking price is $210 million — for one of the largest
portfolios put up for sale in Rego Park in recent years. The properties are
controlled through an LLC called Queens Park Realty Corp.
“There really is no deferred maintenance in these properties
and they don’t have a single violation with the Department of Buildings,” said
Thomas Donovan, a partner at B6 who is managing the sale with colleagues Eugene
Kim, Tommy Lin and Robert Rappa.
The move comes as a newly Democratic State Senate is
expected to introduce legislation that would make it harder to deregulate
apartments or raise rent on regulated units. Investors previously have snagged
rent-regulated properties, aiming to convert them to market-rate units that
would reap bigger profits.
“There is concern because we don’t know what the next round
of legislation will bring, but we’re committed to selling,” Donovan said. “We
think that this is a special enough asset that a host of buyers like families
and institutional real estate investors will see this as a long-term play.”
The properties are also in an Opportunity Zone, which could
be an added incentive for potential buyers who could avoid capital gains taxes
under the program. In addition to the apartments, the package also includes 14
commercial units that are occupied by doctors’ offices and other tenants.