Latest news with #RelatedFundManagement
Yahoo
20-05-2025
- Business
- Yahoo
'They're pushing the eject button': Related unloads monster rent-stabilized portfolio for $192M — another loss
If there are rent-stabilized deals you want off your books, who you gonna call? Peter Hungerford. The head of PH Realty Capital, and possibly the city's most prolific rent-regulated buyer of late, teamed with Rockledge CRE to close on another monster portfolio last week, Hungerford told The Real Deal. The deal, which comprises over 2,000 units spread across five neighborhoods in the Northern Bronx, is the latest sale by Related Fund Management, which has been grinding to cut its exposure to the troubled asset class. At $192.5 million, the purchase price represents a 24 percent discount to the $253 million Related paid in 2014, according to property records. The megalandlord was aiming to break when it started shopping the 34-building portfolio in 2023, GlobeSt. reported. Related's appetite for loss, particularly after spending $30 million on renovations, is just the latest indicator that owners and lenders are desperate to ditch their rent-regulated holdings after the 2019 rent law blocked any path to profit. The legislation effectively capped building revenues for nearly six years. Meanwhile, expenses have surged, arrears mounted and interest rates jumped, dragging more owners underwater. It's a nightmare many landlords just want to end — regardless of the loss. Until recently, Related Fund Management was quietly ditching rent-stabilized deals. As of January, the firm or its affiliates — Related Companies, for example — had shed about two dozen assets over the past few years, a Crain's analysis found. In April, it upped the ante, letting five go for $18 million, or 45 percent of what it paid in 2015. 'They're pushing the eject button,' Hungerford said. 'They don't want to deal with the asset class anymore.' A spokesperson for Related Fund Management did not comment. Hungerford, meanwhile, has been busy picking up those discards. Last year, his firm teamed with Rockledge, Alma Realty and an unnamed pension fund on a $180 million deal for 1,300 units. Sentinel Real Estate sold the portfolio for 40 percent of what it paid before the rent law passed. PH Realty has also been feasting on the sector's distressed debt. In another partnership with Rockledge, it paid PIMCO 45 cents on the dollar for a $61 million loan book backed by six rent-regulated buildings in the Bronx. And Hungerford is hungry for more. As values keep dropping and lenders scramble to offload bad loans, the principal said the rent-regulated market is increasingly swinging in buyers' favor. 'There are a lot more sellers with the same number or virtually no buyers,' Hungerford said. The lack of interest stems from the industry's thesis that rent-regulated assets will remain in decline: Unless Albany amends the law to let owners raise rents when a tenant vacates, for example, landlords won't be able to pull the revenue needed to keep buildings above water. Hugerford's proposition: at a low enough basis, the buildings have upside, particularly if they're in as good of shape as he describes the Related portfolio to be. 'I think we're pretty much the only folks making this bet right now,' he said. Related keeps offloading rent-stabilized properties at steep losses PH Realty takes Sentinel for all the rent-stabilized it's got Rent-stabilized portfolio in contract for $180M — a 40% discount This article originally appeared on The Real Deal. Click here to read the full story.
Yahoo
08-04-2025
- Business
- Yahoo
Related keeps offloading rent-stabilized properties at steep losses
Related Fund Management unloaded five rent-stabilized properties this week in a trade valued at just 45 percent of what they fetched in 2015. It's a deep cut — and a growing trend for this asset class. The Bronx buildings are 100 percent rent-stabilized, according to tax records, meaning there is no shot at raising revenue beyond the inflation-lagging adjustments set by the rent guidelines board each year. A recent comp sold for just 3 percent of the price it originally traded at. Both of these original deals were inked before the 2019 rent law was enacted, which put a de facto cap on rents and decimated values across the asset class. More noteworthy: The latest Related deal signals a growing trend for a firm that recently took on a multi-billion dollar portfolio of rent-regulated debt — and it gives some credence to the frustrations smaller rent-regulated landlords have been airing about the 2019 legislation. A Related Fund Management spokesperson did not immediately respond to a request for comment. The Related Companies and its affiliated entities have been quietly shedding rent-stabilized buildings in piecemeal deals, often at steep losses. A recent Crain's analysis found around two dozen such transactions in the past few years. In one recent example, Related Fund Management let four Prospect Heights properties go for $16 million, almost half off what it paid in 2016. Related Fund Management, which operates independently from the Related Companies, is not the most prolific owner of rent-stabilized properties in New York City. When The Real Deal last counted in 2019, behemoth Blackstone took the cake with 13,361 units; LeFrak, Cammemby's and A&E Real Estate Holdings were close contenders. Still, Related and its various ownership arms are among the largest rental landlords in the city, according to a 2020 count by TRD. For years, most of the cries that the 2019 legislation has made it impossible to run rent-regulated assets have come from mom-and-pop owners. That is, smaller operators often not taken seriously by tenant advocates and some electeds. Now, one of the biggest fish in New York multifamily is axing its exposure, too, a move that throws weight behind those claims, whether Related Fund Management means to or not. Zooming in on the Bronx deal, one bedrooms at the Bronx properties fetched between $1,350 and $1,850 in recent years, according to StreetEasy. That's a pittance compared to market-rate rents in the borough, which averaged $2,473 in February, according to the Bronx Times. In the same period that Related Fund Management has worked to whittle down its rent-regulated holdings, it also took on a massive share of the asset class's debt: a 5 percent stake in failed Signature Bank's $6 billion rent-regulated portfolio. The venture won the loans, split between two pools, for 56 and 60 cents on the dollar. The transaction included a $550 million pot of cash to aid workouts on distressed deals, meaning it didn't take on the risk without some buffer. As for the Bronx deals, Moshe Greenzweig's Cedarbridge Management was the buyer. Cedarbridge could not be reached for comment. This isn't the firm's first foray into rent-regulated housing. In 2022, an entity with the same address as Cedarbridge picked up three loans tied to Isaac Kassirer, one of the earliest flameouts on the heels of the rent law. A month before Signature's collapse, the landlord took out a loan with the bank for four rent-regulated properties it bought off Sugar Hill Capital, another rent-regulated landlord destroyed by the 2019 law. Rent-stabilized building sells for $285K — a 97% value cut Related offloads Prospect Heights rental portfolio for 50% off Related, Community Preservation Corp win stake in Signature rent-stabilized loans This article originally appeared on The Real Deal. Click here to read the full story.
