The properties include: 463-467 W. 159th St.; 2180-2182Amsterdam Ave.; 503-507 W. 176th St.; 531 W. 179th St.; 704 W.180th St.; 559-561 W. 183rd St.; 510-524 W. 184th St.; 507 W. 184thSt.; 515 W. 184th St.; 516-520 W. 188th St.; 283-285 Audubon Ave.;70-72 Pinehurst Ave.; 500 W. 190th St.; and 234-236 E. 118th St.Shimon Shkury, partner in Massey Knakal, tells GlobeSt.com thepurchase price represents approximately $115,000 per unit, with acap rate of 5.5%.

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"The rents in this portfolio are relatively low compared to whatthe market will bear," says Shkury, who handled the sale along withbroker Rob Shapiro and Massey Knakal chairman Robert Knakal, thelead broker on the deal. He adds that the unidentified buyer, along-term holder who owns other assets in northern Manhattan,"clearly saw the value in this portfolio."

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Combined, the properties contain approximately 418,230 sfincluding 500 residential apartments, five super units and 12commercial units. Twenty of the properties are five-storybuildings, while the remaining building has six floors. Shkury saysthat in northern Manhattan, the multifamily market represents "themost stable asset class. It's usually a rent-stabilized asset, andrents have gone up dramatically in the past few years, so thatpresents an upside opportunity in each one of these buildings. Theaverage building has anywhere between 55% and 70% of market rents,meaning anywhere from 30% to 45% of upside. If you buy this type ofasset, your downside is known and protected, assuming expensesdon't go much higher. In this kind of environment, that's exactlywhat investors are looking for."

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Shkury says he believes multifamily will "continue to be thesoup de jour for the next couple of years, either in terms ofarm's-length sales or recapitalizations." Massey Knakal isrepresenting a property at 151st and Broadway where the owner islooking to sell 50% ownership rather than parting with the entireasset, and that's something Shkury expects to see occurring moreoften.

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In contrast to other asset classes, Shkury says, financing isstill available for this kind of product. "As opposed to last yearor two years ago, where debt coverage ratios were much lower, bankstoday are looking at 1.15 to 1.3 on the debt coverage ratio." Thathigher ceiling lends itself to the predictability of a multifamilyproperty's income, he says.

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Moreover, Shkury notes that the areas uptown and in Harlem "haveimproved tremendously in the past few years. They keep improving,because of new developments and people moving up, and we feel thistrend will continue."

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On the other hand, Shkury notes that sales volume has been downin the past nine months, mostly because buyers are more cautious"and sellers are not willing to sell at lower than last year'sprices. If you have equity in the building and you're not willingto sell at par or at a small loss, you're not selling." Onlyrecently has he observed "a little more flexibility" on theseller's side. "Believe me, when there's flexibility, the buyersare there to grab it."

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Paul Bubny

Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.