Stephen and Mordecai Rosenberg.
NEW YORK CITY-The new joint venture between Greystone and the Bassuk Organization will give both firms a chance to capitalize further on New York City’s robust multifamily rental market, says one of the deal’s principals. Greystone, the national provider of multifamily and commercial mortgage loans and the Bassuk Organization, which traffics in real estate investment banking services in the Tri-State area, have formed the Greystone Bassuk Group. The new entity will provide expanded real estate and financial services, including creative debt and equity financing, to commercial real estate clients with multifamily assets across the US.
Richard Bassuk, chairman and CEO of the Bassuk Organization, says the deal was in the works for about four months and built on his long working relationship with Greystone founder and CEO Stephen Rosenberg. “I’ve known Steve Rosenberg for 30 years,” Bassuk says. “He had wanted to access the 80/20 marketplace where I have done a huge amount of business. It’s an opportune time to get together.”
Bassuk says the New York market is very attractive for this kind of multifamily product, with the market’s high-return and low-risk factors, from a developer’s point of view. “Rents are high and construction costs are not rock bottom,” he says, “but they’re not where they were in 2007 and 2008. Total land costs are very favorable.”
The joint venture will be housed at Greystone’s New York headquarters. New hires will be made as business develops. “The 80/20 market is where you have the highest level of sophisication of owners and borrowers,” Bassuk says. “It’s a terrific market to be in.”
The rental market is driven by a scarcity of supply. Bassuk says this is due in part to a large number of technology companies moving to New York whose staffs are opting to be renters rather than buyers. “People who ordinarily buy condos in the $500,000-to-$1-million range are not getting access to the financial market and are remaining as renters,” Bassuk says.
There is an enormous inflation push on the income side, but not on the cost side, he notes, noting that some of his clients have gone up on rents by 12%.
Initally, the joint venture will focus on the Tri-State area, but many clients have portfolios that are much broader, he says. “This area itself is very strong, but we’re looking to see how we can take the same thing to other cities that have the same characteristics,” Bassuk says. “I hope we can double or triple our business in the next two to three years.” One city the joint venture is actively looking at is Chicago, and San Francisco could be another possibility.