Black Spruce, Orbach strike NYC’s biggest multifamily deal of pandemic
By: TRD Staff
Orbach Affordable Housing Solutions’ Meyer Orbach and One East River Place (Orbach Housing, Google Maps)
Rising interest rates and a looming recession weren’t enough to deter Josh Gotlib’s Black Spruce Management from the city’s biggest multifamily deal since the start of the pandemic.
Black Spruce and Orbach Affordable Housing Solutions have agreed to buy a six-building Upper East Side apartment portfolio for $1.75 billion, the Wall Street Journal reported. The buildings, which were not identified apart from 1 East River Place on East 72nd Street, comprise approximately 1,700 units, meaning the deal will cost Black Spruce and Orbach more than $1 million per apartment.
The doorman buildings were built by the late Sheldon Solow, whose company is now being run by his son, Stefan Soloviev. Soloviev Group owns seven rental buildings in the neighborhood altogether, according to its website. Black Spruce and Orbach reportedly beat out other bidders for the portfolio, which is expected to produce initial return rates between 3 and 5 percent, the Journal reported.
Black Spruce and Orbach did not immediately respond to requests for comment from The Real Deal.
The units are mostly market-rate; 15 percent of the units are rent-regulated. One-bedroom units across the portfolio have asking rents ranging between $3,900 and $7,000 per month.
Black Spruce owns more than 4,000 units in the New York City area alone, while Orbach boasts roughly 6,000 units across the country. The two real estate companies are not strangers.
The pair are buying the American Copper Buildings in Murray Hill for a reported $837 million, aided by $675 million in acquisition financing from JPMorgan. The luxury apartment towers are being sold by Michael Stern’s JDS Development Group and the Baupost Group.
The firms have also traded buildings in the past. In November 2020, Black Spruce bought a 48-building portfolio comprising about 675 units in Harlem and the Upper West Side from Orbach for about $200 million, or roughly $300,000 per unit.
The firms are looking to capitalize on Manhattan’s scorching rental market. The median rent in the borough has set records for six consecutive months, crossing the $4,000-per-month threshold for the first time in May, according to a report by appraisal firm Miller Samuel for Douglas Elliman.
Last month, less than 1.8 percent of the borough’s rental stock was available to lease.