Web Sites, Documents and Articles >> Hartford Business Journal  News Articles >

Rush of Rentals

Portfolio of 1,300 troubled Hartford residential units hits market

By Greg Bordonaro

July 04, 2011

Investors looking to put money into multifamily apartment buildings have quite the portfolio to choose from in Hartford.

Dozens of properties have hit the market in recent weeks, all formerly owned in part by Martin Carlin, the financially troubled investor who lost the Bushnell on the Park apartment units to foreclosure.

In all, more than 1,300 units are up for sale encompassing about four dozen separate properties located on the periphery of downtown Hartford.

About half the buildings were lost to foreclosure, while the other half were recently handed back to the original lender through deeds in lieu of foreclosure, real estate sources said.

In addition, several commercial buildings in Hartford and surrounding towns encompassing 126,444 square feet of space — all owned by similar investors —have also gone on the sales block.

The impact that this glut of available real estate will have on the market remains unclear.

Real estate experts who are trying to sell the buildings say they don’t think property values in Hartford will take a major hit, despite the new wave of inventory.

“It’s not going to have a negative impact on the value of Hartford,” said Rick Chozick of Hartford-based Chozick Realty, which is marketing half of the available properties. “The bank is looking for an orderly sale, not a fire sale.”

Chozick is marketing about 30 properties in total, including 23 multifamily apartments with over 650 units. Most of the buildings are located on Huntington, Sigourney, and Webster streets. And all of the properties were formerly owned by various LLCs involving developer Carlin, including The Marks Group LLC and The Alphabet Group LLC.

Carlin is the same developer who was part of the investment group that owned 129 of the 180 units at the Bushnell on the Park residential tower in Hartford that were lost to foreclosure and recently sold to Hamilton Point Investments in Old Lyme.

Chozick said the apartment properties he’s representing have been underperforming for at least the past 18 months and have a significant number of vacancies, which has put the properties on an uneven financial footing.

The buildings, which Chozick began marketing about two weeks ago, were recently handed back to New York Community Bancorp through deeds in lieu of foreclosure.

New York Community Bancorp spokeswoman Ilene Angarola said the “acquisition of these assets was part of a cooperative effort between NYCB and the borrower to stabilize the properties, and to ensure that the borrower’s remaining holdings within the Hartford market continue to be operated successfully.”

She said the bank and its agents are working to make repairs to improve occupancy in an effort to reposition the assets.

“Offers from qualified buyers with demonstrated ability to manage these assets will be considered by the bank on a case-by-case basis, however the bank does not have any specific timetable on sales at this time,” Angarola said.

Chozick said the bank is looking to sell the buildings to a number of investors instead of one large portfolio buyer.

“There has been a high level of interest in the properties,” Chozick said. “Most investors have been local investors.”

Meanwhile, CB Richard Ellis’s Stamford office is brokering another set of properties formerly owned by the Surrey Group LLC, which Carlin is also involved in. That includes 23 multifamily apartment buildings containing about 680 units, which were lost to foreclosure. CBRE is marketing the properties, which are spread out among more than a dozen locations including Collins, Woodland, and Forest streets, for Wells Fargo Bank.

The Surrey Group lost the buildings to foreclosure last year after defaulting on nearly $40 million in loans.

David Panagore, the city’s chief operating officer, said all available properties remain relatively cared for and that the neighborhood has expressed an interest in seeing the apartments becoming more individualized, rather than being sold in bulk to a single investor.

Real estate experts say the value of apartment buildings in the city could be negatively impacted if the available properties are sold in bulk because it could make the lenders more willing to offer a discount. But Chozick said that is not the goal for the apartments he is trying to sell off, although he is open to offers from portfolio buyers.

Panagore said the city has not had any prospective buyers approach them for financing help yet. He also said the city will continue to keep a close watch over the properties.

According to city officials, the Marks, Surrey and Alphabet groups owned a total of 79 properties with 2,274 units. And the Marks Group has transferred most, if not all, of their properties to New York Community Bancorp through deeds in lieu of foreclosure, the city said.

Those 79 properties housed 226 Section 8 tenants, the city said. In terms of the overall market, Chozick said he is seeing a pickup in investor interest in multifamily apartment buildings, which should protect property values of the available inventory. He anticipates it will take about a year to sell his portfolio.

“Demand for multifamily apartments is outstripping availability,” Chozick said.

Reprinted with permission of the Hartford Business Journal. To view other stories on this topic, search the Hartford Business Journal Archives at http://www.hartfordbusiness.com/archives.php.
| Last update: September 25, 2012 |
Powered by Hartford Public Library  

Includes option to search related Hartford sites.

Advanced Search
Search Tips

Can't Find It? Have a Question?