Belnord Apts. sold for $15M; new owners plan turn-around.

Rockwood Realty Associates announces the sale of The Belnord, a 226-unit rental apartment building located on the Upper West Side of Manhattan to a group of investors headed by Property Markets Group for $15 million, all-cash. John Magee, president of Rockwood and Jacqueline Mansfield, vice president, represented the owners.

Property Markets Group, Inc., a New York City real estate owner and developer which specializes in turnaround projects, acquired the Belnord Apartments on October 28 in a $15 million all-cash transaction.

The Belnord Apartments, located at 225 West 86th Street, occupy the entire city block from 86th to 87th Streets, from Broadway to Amsterdam Avenue, and comprise 226 residential units and 25,000 square feet of retail space.

The Belnord, a New York City Landmark, is one of the Upper West Side's oldest, most prestigious apartment buildings. Constructed in 1908, the property contains a 22,000 square-foot center courtyard. One of several prominent apartment buildings which include the Dakota and the Apthorp, The Belnord was constructed around the turn-of-the-century to house New York's most affluent residents. At the time of completion, the Belnord was the largest apartment building in the world.

"We are delighted to have acquired such an important property," said Ziel Feldman, a partner with Property Markets Group, Inc. (PMG). "We are confident that we have the resources and the talent to restore the Belnord Apartments to their deserving status as Class-A luxury rental residences."

PMG has dedicated more than $5 million for a major capital improvement program for the Belnord Apartments. The program includes mechanical upgrades encompassing the plumbing and electrical systems, along with new staffing and security measures. The capital improvement program also covers major cosmetic improvements to the property's exterior, courtyard, hallways and elevators.

"Most important, working with the tenant community, we have been able to put an end to a 20-year conflict between residents and the property's former owner," Feldman added. "We like to think that we are helping to restore peace of mind for the tenants at the same time we restore their homes to first-class working order."

Since 1979, the Belnord Apartments have operated under a Harassment Lien posted by the state's Division of Housing and Community Renewal. This lien was imposed on the former owner, Lillian Seril, and froze all rents in the building. Despite more than 20 years of legal action and negotiations, Seril and the tenant community were unable to reach agreement and lift the lien.

"We have done in four months - with fair, honest negotiating and listening to the tenants' concerns - what the former owner hadn't been able to accomplish in more than two decades," Feldman said. "We are now waiting for DHCR to complete its lifting of the lien and the fair resetting of the rental rates."

PMG, which also owns PMG Realty Management and PMG Construction, has an illustrious track record for success in completing residential turnaround situations. Among the firm's most notable projects, PMG acquired a 40-unit residential property located on West 64th Street from the Resolution Trust Corporation, completed a $600,000 renovation of the property, ended a seven-year rent strike and increased the annual rent roll by more than 300 percent.

In another recent example, PMG purchased 10 buildings totalling 176 apartments and six stores on West 49th Street (318-340 West 49th Street), dedicated $2.2 million for capital improvements, and has increased the rent roll and rent collection significantly.

In April, PMG and its partners acquired 500 West End Avenue, a 111-unit prewar doorman, elevator building. "With reallocation of staffing and the complete renovation of the apartments, we are now able to command top market rents," Feldman said. "Currently, we are in the planning stages for a new, expanded lobby and adding 24-hour doorman service. We are well on the way to completing the repositioning of this building in the market."

According to Feldman, PMG's recent projects underscore the company's ability to successfully complete the renovation and repositioning of the Belnord Apartments.

"Our expertise is in identifying opportunities to increase property values, and managing the process ourselves to make sure the job gets done properly and that our tenants are satisfied with the results," Feldman said. "We continue to aggressively seek out under-valued real estate and, with partner capital, investor equity or conventional financing, acquire, improve, and enhance the value of the holdings."

During the past 18 months, PMG has successfully acquired title to 28 additional multi-family buildings with an aggregate asset value in excess of $70 million. PMG currently owns over 1 million square feet of residential space and more than 100,000 square feet of retail space and garages in Manhattan and in developments throughout the Northeast. Founded by principals Ziel Feldman, Steven Held, Kevin P. Maloney and Patrick O'Keefe, PMG owns fully-staffed in-house property management and construction companies. In the case of the Belnord Apartments and many other PMG acquisitions, Gary Barnett, represented the foreign investor group in this transaction.

Earlier this year, Rockwood represented the same owner in the long-term net lease of 33 East 17th Street, a 107,000 square-foot commercial building located on the north side of Union Square, to a joint venture comprised of The Related Companies, L.P. and The Carlisle Group.