A developer appears to have taken a bath with a portfolio of rent-stabilized buildings in Washington Heights.
Kahen Properties has sold the four multifamily and mixed-use prewar properties that have about 125 units among them to Elysee Investment Corp. for $8.8 million, according to the city register. Kahen, whose principal is Alex Kahen, paid $22.1 million for the quartet in 2018, the register shows, and so appears to have incurred a nearly 60% loss.
Reached by phone Friday in his Manhattan office, Kahen declined to comment on the deal, which went into contract March 26 and closed April 3. But it comes as some owners of rent-stabilized buildings have taken big hits on their properties after being squeezed on two fronts. On one side is the pressure of a raft of pro-tenant laws passed in 2019 and afterwards that have made it tougher to raise rents on vacant rent-regulated units.
And high interest rates have made it difficult to refinance debt at favorable rates, a scenario that seems to particularly be hurting landlords who borrowed money a decade ago and are approaching the maturity dates of those mortgages now.
The properties Kahen sold are 476 W. 165th St., a 54-unit site bought for $9.5 million in 2018; 503 W. 164th St., a 24-unit building that cost $4.6 million seven years ago; 524 W. 162nd St., a 20-unit offering that went for $3.4 million; and 2153 Amsterdam Ave., a 25-unit site with a ground-floor restaurant and a cake shop that last traded for $4.6 million, based on the register.
The buildings appear to have low tenant turnover and lower-than-market-rate rents. No. 476, for instance, has seen only about a half-dozen apartments hit the market in the last four years, according to StreetEasy. And the most recent, a two-bedroom listed in June, was asking about $2,000 a month.
The median rent in Manhattan in February, meanwhile, was $4,500 a month, a price that typically fetched a one-bedroom.
Kahen Properties’ other holdings include the Mason, an upscale 70-unit rental building at 145 Madison Ave. in NoMad. Kahen bought two properties that previously stood at the site near East 32nd Street in 2013 for $12.3 million and later razed them, paving the way for the current project. A one-bedroom unit there is currently available for $5,300 a month.
But their exact portfolio is somewhat vague as there seem to be a couple firms that have the same name but different principals, like Majid Kahen’s Queens-based Kahen Properties.
Elysee, whose CEO is Haim Yehezkel, invests in shopping centers, hotels and apartment buildings in New York and South Florida, according to a profile on the real estate data website LoopNet. The firm, which appears to have bought the properties without using a mortgage, had no comment by press time.
