By E.B. Solomont & Hiten Samtani, TheRealDeal, Dec. 5, 2014
Gary Barnett’s Extell Development is in contract to sell the Belnord, a storied, block-long rental building on the Upper West Side, The Real Deal has learned. Sources said the buyer is Ziel Feldman’s HFZ Capital Group, which has made several big bets on rental product in the neighborhood. Feldman also was one of Barnett’s investors when Barnett bought the Belnord in 1994 for the bargain price of $15 million.
Built in 1909, the Belnord at 225 West 86th Street has 226 rental units – many of them rent-controlled – and stretches from 86th to 87th Streets Between Broadway And Amsterdam Avenue. At the building’s Entrance On 86th Street, wrought iron gates open up to a 22,000-square-foot courtyard.
Though the purchase price remains unknown, a TRD analysis, based on data from Genesis Computer Consultants for the year 2012, points to a sale price between $240 million and $300 million. That calculation is based on the building’s $12 million net income in 2012, the most recent year available, and a cap rate of 4 percent to 5 percent.
Despite the seeming profitability of such a sale for Extell, owning the Belnord has come with its fair share of complications.
“In 1994, Extell inherited tenants who’d previously engaged in a decades-long rent strike after the former owner wouldn’t allow repairs. Extell poured millions into renovating the building with the goal of turning rent-controlled units over to market rents by 2012.”
Read the full article in TheRealDeal.