A subsidiary of New Jersey-based property owner Orbach Group has acquired a Section 8 housing portfolio in the Gravesend section of Brooklyn from Black Spruce Management for $17 million, Commercial Observer has learned.
The 51-unit portfolio is comprised of 17 buildings at 2320 through 2336 West 12th Street and 2315 through 2321 West 13th Street, between Avenues W and X, according to information provided by Orbach. The 17 structures are all three-unit buildings, in which 34 apartments have three bedrooms each and are priced at $2,134 per month, while the remaining 17 apartments are one-bedroom units going for $1,372 a month.
The buildings includes 17 parking spaces, which rent for $175 a month. Black Spruce purchased the portfolio for $11.4 million in June 2015, city records show.
“It’s a good area and the buildings were well maintained and have a cash flow, and when you combine all that with the scarcity of the market, it was a good deal,” said Aaron Jungreis of Rosewood Realty Group, noting the properties collectively have a roughly 4.5 percent cap rate. He represented both sides in the transaction.
Orbach manages more than 6,000 affordable and market-rate multifamily units in various states including New York (in New York City, specifically), New Jersey, Pennsylvania, Virginia and California.
The company wants to increase its affordable housing units in the city, and the Gravesend portfolio has a housing assistance payment contract in place with the U.S. Department of Housing and Urban Development. Tenants generally pay about 30 percent of the rent at the property and the rest is subsidized by the government.
“This is a strategic acquisition for us that strengthens our portfolio in both the short- and long-terms,” Meyer Orbach, the chairman of Orbach, said in a prepared statement. “This also cements our leading role in preserving and maintaining affordable housing options across New York City.”