Zara Realty has acquired a five-building portfolio of apartment buildings in Queens for $39 million from the large residential real estate owner Urban American.
Ken Subraj, an executive and principal at Zara, confirmed the deal and said that his company was drawn to the buildings because they are both similar and closely located to the company’s existing holdings.
“Two of the building are side by side and the other is a good golf shot away from another one of our buildings,” Mr. Subraj said, explaining that he often visits the company’s properties, especially new buildings that it plans to upgrade, and that the firm prefers to keep its holdings in close proximity.
Mr. Subraj, who operates Zara with his brothers Jay and George, the founder and president of the firm, said the acquisition, which totals about 350 units, would bring the company’s holding to about 2,400 units, a residential empire the brothers have built over three decades in eastern Queens neighborhoods like Jamaica and Hollis.
The buildings are located at 191-11 Woodhull Avenue and 91-59 191st Street in Hollis and 148-48 88th Avenue, 88-09 148th Street and 88-25 148th Street in Jamaica. A team from the real estate brokerage company Massey Knakal, led by the firm’s chairman Bob Knakal and Brian Sarath, a director of sales who specializes in Queens, handled the deal for Urban American. Mr. Knakal couldn’t be reached for comment.
Mr. Subraj said the purchase price equated to a roughly 6 percent return, a going rate of return for property investments in the city. The company he said would invest about $2 million into the portfolio to make various improvements he said, such as renovate lobby space and vacant apartments as they come available. He said that the firm did the investment was done with a long term strategy in mind because it will take years to do all the renovations, due to the natural turnover rate of the apartments and because basic infrastructure in the buildings such as boilers, elevators, roofing and facades, were all in good condition and did not yet need replacement.
“There’s really very little to do going forward,” Mr. Subraj said. “These capital improvements, they are going to take a minimum of 15 to 25 years to do. You do a boiler every 25 years. We really looked at this an opportunity for the future.”
Mr. Subraj said that his brother George came to the U.S. in the early 1970s from the brothers’ home country of Guyana.
“George started here working in an appliance store and when he was looking for an apartment to rent, he realized how hard it was to get a clean, comfortable,” Mr. Subraj said. “He said I can do this business myself so he started as a residential broker selling homes.”
Mr. Subraj and his brother Jay eventually joined George in the business and they began buying apartment buildings.
“In those days, you could put down half a million dollars for a 50-unit building,” Mr. Subraj said. “In those days, a building sold for three times the rent roll. Today it’s like 10 or 11 times the rent roll. Its not that easy to make a profit.”
Mr. Subraj said that rents ranged in the new portfolio from about $950 for a studio to $1600 for a two bedroom.