Meadow, Davean pick up 12 apartment properties for $77M
Familiar strategy as joint venture secures loan from Fortress Investment Group
By: Keith Larsen
From left: Meadow Partners’ Jeff Kaplan and Davean Holdings’ Sean Lefkovits (Meadow Partners, Davean Holdings, Getty)
Carlyle isn’t the only institutional player buying apartment buildings individually in New York City.
Meadow Partners and Davean Holdings have acquired 12 free-market, multifamily properties in Brooklyn and Manhattan in the past six months, spending $77.2 million in all. The joint venture secured a $59.6 million loan from Fortress Investment Group for the acquisitions, according to the debt broker, Walker & Dunlop.
Last year they went on a similar spree, acquiring 12 multifamily properties in New York City for $58 million. The joint venture snagged financing from Fortress for those purchases as well. The newly assembled 24-property portfolio has 175 units.
Walker & Dunlop’s Adam Schwartz and Sean Reimer arranged the loans for the deals.
Carlyle has employed the same strategy on a larger scale. The private equity giant has bought more than 130 small apartment buildings in Brooklyn, most of them in trendy neighborhoods such as Bushwick, Bedford-Stuyvesant, Park Slope and Cobble Hill, according to an analysis by The Real Deal.
“Investors want exposure to multifamily and they are saying, ‘How can we get it?’” said Reimer. “I can’t build it. … And large Class A [multifamily portfolios in New York City] very rarely trade anymore.”
Walker & Dunlop and Davean Holdings declined to disclose the addresses of Meadow and Daveon’s dozen recent purchases. Sean Lefkovits, managing partner of Davean, said some of them are in Park Slope and others are around NYU’s campus in Greenwich Village. A few were purchased from Fairstead, according to Lefkovits.
Small multifamily properties have traditionally been owned by mom-and-pop landlords. But in the past few years private equity firms and larger investors have turned their attention to the asset class.
They have been drawn to the sector by the limited supply of multifamily buildings and their steady rent growth. Meanwhile, harsh restrictions in the 2019 rent law have diminished profitability of rent-stabilized buildings, reducing interest in that space.