Silverstone, RWN Purchase Manhattan Multi-Family Building for $53M, Plan Repositioning

February 24, 2012
By Nicholas Ziegler, News Editor

Silverstone Property Group has acquired a 109,000-square-foot, mixed-use residential tower in the Murray Hill submarket of Manhattan for $53 million. The off-market transaction, in which Silverstone took the property in conjunction with equity partner RWN Real Estate Partners L.L.C., will see the buyers take possession of 247 E. 28th St., a 17-story building with 128 one- and two-bedroom units.

Silverstone plans a significant repositioning for the property, transforming it into a high-end rental community through a plan that will see a gut renovation of the lobby, all common areas and most apartment units. “We are excited to turn this property into one of the premier high-end rental properties in the area,” Ari Shalam, managing director of RWN, said.

New York City remains a top apartment investment market, according to a recent report by services firm Marcus & Millichap Real Estate Investment Services Inc. “As home ownership remains out of reach for nearly 80 percent of households in the city, demand for apartments will remain healthy,” the firm noted. Intense competition for the most desirable properties will see developers “form joint ventures with private-equity funds and acquire redevelopment properties in Manhattan,” which is exactly the case for Silverstone.

Additionally, the competition — especially from REITs — will keep cap rates low, with high-demand apartments trading in the 5 percent range. For 2012, the firm sees across-the-board vacancy falling by 10 basis points and effective rents rising by 7 percent.

The building’s ground-floor retail space is occupied by a Chase Bank branch.

The acquisition was financed by M&T Bank. Multi Investment Group represented both buyer and seller in the transaction.