Nonprofit Buys East Harlem Building for $172M to Create Affordable Housing
By Mark Hallum July 2, 2024 12:13 pm
reprints
Nonprofit social services organization Breaking Ground has acquired an East Harlem student housing building to convert it into supportive and low-income housing.
Principal Asset Management and CenterSquare Investment Management sold the 435-unit housing facility at 1760 Third Avenue to the nonprofit for $172 million, according to property records. Breaking Ground secured a $128 million mortgage from the New York City Department of Housing Preservation and Development for the purchase.
Newmark (NMRK)‘s Adam Spies, Adam Doneger and Michael Collins arranged the sale, which includes $20 million for the transfer of air rights, sources said. Newmark declined to comment on the deal.
Bisnow first reported the deal.
Principal and CenterSquare bought the property in 2019 for $212.5 million and started using the facility as a temporary relief center for the new wave of migrants entering the city in 2023. The current contract with the city, which operates the shelter, expires in November, at which time Breaking Ground plans to convert the facility into more permanent housing for migrants, the nonprofit said.
The nonprofit said in a statement it has been in talks to purchase the property since 2022, but held off to keep its use as a migrant shelter going for longer.
“Addressing our housing and homelessness crisis in New York City requires bold action,” the nonprofit said in a statement. “We worked with the owner and NYC Health + Hospitals to delay our acquisition when it was proposed to use the site as a shelter for migrants.”
Principal and CenterSquare did not immediately respond to requests for comment.
Renovations for the 19-story building between East 97th and East 98th streets will kick off near the end of 2024 and last 18 to 24 months, according to Crain’s.
About 261 units will be set aside for people working their way out of homelessness while the rest will be reserved for families making below 60 percent of the area median income, according to Breaking Ground.
More financing for the acquisition came from the New York City Acquisition Fund, the Low Income Investment Fund and the state Office of Temporary and Disability Assistance, according to Breaking Ground.
Mark Hallum can be reached at mhallum@commercialobserver.com.
