One of the country’s biggest apartment owners is pitching a large Manhattan portfolio that would be insulated should Zohran Mamdani follow through on his campaign promise to freeze the rent.
UDR, the Colorado-based multifamily REIT, and its partner MetLife are eyeing up to $500 million for a group of rental buildings around Columbus Circle, The Real Deal has learned.
Four of the five buildings are free market. And the fifth is subject to an older 421a agreement under which an owner could raise rents by 47 percent before hitting their legal rent limits.
“With no exposure to income-restriction and minimal impact from Rent Guidelines Board limitations, the portfolio benefits from robust, market-driven rent growth across all assets,” read an offering memo from Newmark, where a team led by Adam Spies and Marcella Fasulo is overseeing the sales process.
The offering comes as investors anxiously eye New York’s mayoral election in November. Assembly member Mamdani won a decisive victory in the Democratic party primary in June, in part by promising to freeze rents on the city’s roughly 1 million rent-stabilized apartments. This comes amid increased rent-stabilized distress, with that housing stock seeing foreclosures and delinquencies rise precipitously, most of which is attributed to the 2019 law that essentially blocked substantial rent increases.
Representatives for UDR, MetLife and Newmark did not immediately respond to requests for comment. The REIT, led by CEO Tom Toomey, is eyeing a price of $450-500 million for the 710-unit portfolio — either through an outright sale or a recapitalization.
The buildings are 775, 795, 805 and 808 Columbus Avenue, as well as 801 Amsterdam Avenue.
UDR teamed up with MetLife in 2012 to buy the portfolio from Laurence Gluck’s Stellar Management and the Chetrit Group for $635 million.
It’s not clear why the portfolio’s value has declined, but this wouldn’t be UDR’s first loss in recent memory. In January, the company sold an apartment building at 395 Leonard Street in Brooklyn for $127.5 million, a slight discount to the $130.4 million the company had paid six years earlier.
“The approximately 5 percent decline in value for Leonard Pointe in the six years UDR owned the property compares to a 15-20 percent decline for Green Street’s New York Metro commercial property price index, suggesting Brooklyn property values have held up better than other sub-markets in NYC,” the REIT said in an announcement at the time.
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