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Thursday, 16 March 2017

Bistricer's Clipper Realty Paying $87.5Mln for Brooklyn, N.Y., Apartments

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Commercial Real Estate Direct Staff Report

David Bistricer has taken his Clipper Realty Inc. investment operation public, raising $86.3 million from the sale of shares.

Proceeds of the stock offering will be used, in part, to fund the $87.5 million, or $543,480/unit, purchase of 107 Columbia Heights, a 161-unit apartment property in Brooklyn, N.Y.,'s exclusive Columbia Heights neighborhood.

The property is being sold by the Watchtower Bible & Tract Society, an affiliate of the Jehovah's Witnesses. The organization, which is liquidating much of its real estate, had made upgrades to the property some 10 years ago. But Clipper expects to invest up to another $15 million on upgrades. In a regulatory filing, it said it would convert some public space, presumably including the building's rooftop terrace, to 12 additional units. The property was constructed in 1959, well before the Columbia Heights area was designated a historic area and height restrictions were imposed. As a result, many units have unobstructed views of the Brooklyn Bridge and lower Manhattan.

Clipper, in its filing, said after upgrades are completed, unit rents ought to run up to $75/sf. Given the average unit size of 956 square feet, it expects monthly rents to run as much as $6,000/unit.

Clipper's stock offering, which was led by FBR and Raymond James, allows Bistricer to provide liquidity to his existing investors. The company was formed in 2015 when Bistricer raised some $130 million of capital from a group of institutional, foreign and accredited investors. It used that capital to acquire, from a predecessor Bistricer entity, a portfolio of eight properties that have 3,269 apartment units, 472,653 sf of office space and 109,275 sf of retail and parking space in Manhattan and Brooklyn.

Among its investments is the Tribeca House, with 505 units and 77,200 sf of retail space at 50 Murray St. and 53 Park Place in lower Manhattan. Clipper is planning to upgrade the property's common areas in order to justify potential higher apartment rental rates. Its end game also might involve converting the property to for-sale condominiums, given the high prices units sell for in the Tribeca area.

Bistricer had purchased the property, comprised of two adjoining buildings, in 2014 for $518 million, or just more than $1 million/unit. Clipper, in its filing, hinted that it would be able to sell units for more than double that amount, given prevailing condo prices.

Clipper also owns a portfolio of 59 apartment buildings with 2,500 units in Brooklyn's Flatbush Gardens neighborhood; the Aspen, with 232 units at 1955 First Ave. in Manhattan; 141 Livingston St., with 206,084 sf of office space in downtown Brooklyn, and 250 Livingston, two blocks away, that includes 36 apartment units and 353,000 sf of office space. The office space in both buildings is fully occupied by the City of New York.

Comments? E-mail Orest Mandzy, or call him at (267) 247-0112, Ext. 211.



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“The Weekly” is Commercial Real Estate Direct’s PDF newsletter, sent to subscribers every Friday morning. With over 100 news stories published on Commercial Real Estate Direct each week, “The Weekly” features the top stories in commercial real estate that industry participants need to know first. “The Weekly” also contains:

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Additional Info

  • Syndicate to Realpoint: No
  • Cities: New York City
  • States: New York
  • Sector: Multifamily
  • Subject: Property Acquisitions (ACQ), Stock/Equity Offerings (IPO)
  • Valuation: Between $50 million and $100 million
  • Private: No
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Data Digest

 

CMBS DELINQUENCY VOLUME

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CMBS SPECIAL SERVICING VOLUME

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Top Bookrunners Domestic, Private-Label CMBS - 2016
Investment Bank #Deals Vol$mln MktShr%
JPMorgan Securities 14.94 10,350.16 15.14
Deutsche Bank 14.21 9,926.60 14.52
Wells Fargo Securities 13.36 9,513.96 13.92
Citigroup 10.87 8,061.79 11.80
Goldman Sachs 10.05 7,563.72 11.07

 

RCA CPPI

 

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CMBS 2.0 Spreads

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Top CMBS Loan Contributors - 2016
Lender #Loans Vol$mln MktShr%
JPMorgan Chase Bank 133.67 8,670.33 13.34
Goldman Sachs 156.20 7,418.37 11.41
Deutsche Bank 178.17 6,510.75 10.02
Citigroup 184.41 5,512.20 8.48
Morgan Stanley 113.18 4,130.53 6.35

 

 

 

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