Sentinel Real Estate Offloading NYC Rent-Stabilized Portfolio for $180M
The deal comes in at 40% less than Sentinel paid for the properties
By Nicholas Rizzi March 21, 2024 2:43 pm
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A joint venture is buying a 24-building rent-stabilized portfolio from Sentinel Real Estate for $180 million, according to a source with knowledge of the deal.
Alma Realty, PH Realty Capital and Rockledge went into contract to pick up the 1,300-unit apartment portfolio spread out across Manhattan and Brooklyn, according to the source and The Real Deal, which first reported the deal.
The 1.2 million-square-foot portfolio includes properties in Upper Manhattan and the Brooklyn neighborhoods of Crown Heights and Brighton Beach, TRD reported. Its sale price represents a 40 percent loss from the $300 million Sentinel paid throughout 2014 and 2019, according to TRD.
Properties include 725 West 184th Street in Washington Heights, 200 Brighton 15th Street in Brighton Beach and 165 East 19th Street in Prospect Park South. Sentinel acquired the East 19th Street property along with several other Brooklyn buildings in 2014 for $42.5 million.
Representatives for PH Realty and Rockledge declined to comment. Spokespeople for Alma and Sentinel did not immediately respond to requests for comment. It’s unclear who brokered the deal.
Sentinel, which owns 27,500 apartment units across the country, isn’t alone in facing huge losses on rent-stabilized properties in the city. After the New York State Legislature altered the rent-stabilization laws in 2019 — making it harder for owners to raise rents through renovations or after a tenant leaves a unit — the valuations of those buildings dropped by 30 to 50 percent, as Commercial Observer previously reported.
Sentinel previously faced legal issues over the property management firms it hired in an attempt to deregulate its rent-stabilized units. In 2022, 29 limited liability companies tied to Sentinel agreed to pay $4 million over a scheme to allegedly inflate and falsely report the costs of renovating those units to deregulate them, Crain’s New York Business reported.
Though state Attorney General Letitia James found that Sentinel wasn’t directly involved with the plan — the property management firms on the portfolio, Newcastle Realty Services and Highcastle Management, were behind it — the LLCs were still responsible for the fine, according to Crain’s.
Nicholas Rizzi can be reached at nrizzi@commercialobserver.com.
