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NEW YORK CITY-A 21-building portfolio of walk-up apartment buildings in northern Manhattan has sold to an unidentified buyer for $54 million. Known as “the New 118th Upper Manhattan Portfolio,” the properties, all in Washington Heights and central Harlem, were sold in an all-cash transaction by Richard Wasserman, a bankruptcy trustee representing a group of investors.

The properties include: 463-467 W. 159th St.; 2180-2182 Amsterdam 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. 184th St.; 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 the purchase price represents approximately $115,000 per unit, with a cap rate of 5.5%.

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

Combined, the properties contain approximately 418,230 sf including 500 residential apartments, five super units and 12 commercial units. Twenty of the properties are five-story buildings, while the remaining building has six floors. Shkury says that in northern Manhattan, the multifamily market represents “the most stable asset class. It’s usually a rent-stabilized asset, and rents have gone up dramatically in the past few years, so that presents an upside opportunity in each one of these buildings. The average building has anywhere between 55% and 70% of market rents, meaning anywhere from 30% to 45% of upside. If you buy this type of asset, your downside is known and protected, assuming expenses don’t go much higher. In this kind of environment, that’s exactly what investors are looking for.”

Shkury says he believes multifamily will “continue to be the soup de jour for the next couple of years, either in terms of arm’s-length sales or recapitalizations.” Massey Knakal is representing a property at 151st and Broadway where the owner is looking to sell 50% ownership rather than parting with the entire asset, and that’s something Shkury expects to see occurring more often.

In contrast to other asset classes, Shkury says, financing is still available for this kind of product. “As opposed to last year or two years ago, where debt coverage ratios were much lower, banks today are looking at 1.15 to 1.3 on the debt coverage ratio.” That higher ceiling lends itself to the predictability of a multifamily property’s income, he says.

Moreover, Shkury notes that the areas uptown and in Harlem “have improved tremendously in the past few years. They keep improving, because of new developments and people moving up, and we feel this trend will continue.”

On the other hand, Shkury notes that sales volume has been down in the past nine months, mostly because buyers are more cautious “and sellers are not willing to sell at lower than last year’s prices. If you have equity in the building and you’re not willing to sell at par or at a small loss, you’re not selling.” Only recently has he observed “a little more flexibility” on the seller’s side. “Believe me, when there’s flexibility, the buyers are there to grab it.”

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