24-04-2025
- Business
- Business Journals
Albany's Center Square sees rise in seller-financed deals for real estate
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A broker active in the neighborhood says seller-financed deals are becoming more common there.
Story Highlights 10-unit property in Center Square recently sold for $1.15M.
The deal involved seller financing, which a broker says has become more common.
Center Square neighborhood faces commercial struggles despite residential demand.
John Alund has grown accustomed to working with clients on seller-financed deals to get multifamily homes sold in Albany's Center Square neighborhood.
"It's tough to make the numbers work in the current market," said Alund, principal broker/owner of Lincoln House Realty.
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With average mortgage interest rates about the same level as a year ago, borrowing costs remain relatively high compared to the pre-2022 real estate market conditions.
Prices are also up due to strong demand and tight inventory.
Instead of conventional bank financing, Alund has been structuring more deals in which the seller holds the mortgage, an arrangement that has become increasingly common in commercial real estate in recent years.
That was the case earlier this month, when the seller of 303 State St. finalized a $1.15 million deal for the 10-unit property.
There are nine apartments in the three-story building, plus an apartment in a separate carriage house.
The seller, Ladopoulos Properties LLC of East Greenbush, loaned $747,500 to the buyer, S+T 68 West House LLC of Gloversville, according to a filing in the county clerk's office.
Petermichael Torabkhan signed the mortgage.
Bank financing was a challenge because the total rental income was "so light," Alund said.
Rents range from $700 to $1,000 for the units, which are 300 to 800 square feet (the carriage house apartment is even smaller). Those amounts are significantly below the asking rents in the local market, Alund said.
"It would have been tough to get a lender on board," he said.
Alund and his brother, James, have been listing and selling properties in Center Square for more than a decade.
A short walk from the Capitol and state government complex, the area is filled with homes built in the late 1800s, "from charming wood frame cottages to huge brownstone mansions," according to the neighborhood association.
Bars, restaurants and other businesses line Lark Street, though the commercial corridor has struggled in recent years and now has many vacant storefronts.
Thus far, demand for residential property in the neighborhood hasn't suffered, Alund said, whether it's smaller, owner-occupied buildings or larger structures with more than five apartments.
Alund lived in Center Square for 15 years until moving with his wife to Coxsackie a few years ago before the birth of their child.
He and his brother still own about 50 units in the neighborhood and manage many more for other landlords.
"When I first got down there, man, [Lark Street] was rocking," he said. "Now it's interesting to see it on a bit of a downturn, but I also have a lot of colleagues, friends and property owners that owned for many years before me and have been through different cycles. I think a lot of people are just holding out for the next upturn. I think it's only a matter of time."
