Late Last Year He Bought 15 Properties; Now He Owns About 5% Of Hartford's Rental Stock
By JEFFREY B. COHEN, Courant Staff Writer
February 14, 2008
A New York investor has spent nearly $70 million to add hundreds of units to his portfolio of Hartford apartments, bringing his holdings to roughly 5 percent of the city's total rental stock and likely making him the city's largest single owner of residential property.
Robert Sandell, head of Marks Group LLC, bought 15 properties for $68.9 million late last year.
Brokers and property managers say that the purchases — although significant — will have no effect on tenants or the market generally. Instead, they said, they're a sign that Hartford apartments are a good buy.
"The story is that this investor has identified Hartford as a market to buy bulk," said Michael Stone, a multihousing specialist at real estate firm CB Richard Ellis. "He sees there's decent value-added potential in these properties, and he, like many other private investors, is trying to do something bigger."
"It's indicative of Hartford's attraction as a destination for investment capital that elsewhere has a little more risk and probably a lot less upside," Stone said.
One of the sellers was Haralambos Kostopoulos of Pomona, N.Y. David Barry, Kostopolous' attorney, said his client — who used to commute to Hartford three times a week to manage his properties — sold his entire portfolio, including property in New Britain, to Sandell when he came asking.
"I wouldn't say he was actively marketing the properties," Barry said. "The buyer came to him."
Kostopoulos and Sandell are part of a decadelong trend of New York private equity investors finding value in Connecticut. Here they can spend less than $75,000 to buy an existing apartment unit rather than spending twice that much to build one new.
"That's New York money that looks at the per-unit price and sees a good buy," said Martin Kenny, owner of the Trumbull on the Park apartments downtown. "They try to put in some modest money with working crews that fix the carpets, fix the windows and fix the appliances and try to come in and get higher rents."
Having bought at least three large portfolios of apartment properties over the past few years, Sandell is now said to own about 2,000 apartment units in the city.
It's a lot, but it's not enough to control a market, Stone said.
"The quantity of apartments that transferred isn't going to change this market at all," Stone said. "From a tenant perspective, things will be status quo. The product that was purchased — there's plenty of it."
"There's not only enough product, but there's still a relatively diverse group of owners that own a competitive group of properties," Stone said.
Sandell did not return a call for comment to his home. His attorney did not return several calls for comment.