By: Benyamin Davidsons
Investment firm KKR has been on a buying spree for Brooklyn properties. The Manhattan-based firm has recently closed on its purchase of two rental apartment buildings for a combined total of $76.9 million, as per property records. As reported by Crain’s NY, LLCs found linked to KKR purchased 75 Ralph Ave. in Bedford-Stuyvesant for $30.6 million, and 10 Lexington Avenue in Clinton Hill for $46.3 million. Bruman Realty was the seller for both properties, as per property records.
The building purchased on Ralph Avenue was built in 2016 and boasts 57 residential units spanning six floors. Active listings at the property are asking between $2,300 to $3,000 in rent, as per StreetEasy. The Lexington Avenue property, which was built in 2015, has 81 residential units and is five stories tall. Asking rents for active listings in the building range from about $2,800 to $4,100. KKR & Co Inc, founded in 1976 and formerly known as Kohlberg Kravis Roberts & Co, is now a publicly traded company on the NYSE.
Back in 2014, Bruman had purchased the Ralph Avenue site for $4.3 million, and the Lexington Avenue site in 2012 for roughly $6.2 million, as per property records. As per Crain’s the sales are seemingly part of an $860 million partnership deal forged in the summer between KKR and Dalan Management to purchase a portfolio of new Brooklyn rental buildings from Bruman. KKR declined to comment on the deal. Dalan did not respond to a request for comment.
The timing for the acquisitions coincides with the ongoing pandemic and the subsequent drop in rental prices across the five boroughs of New York City. The latest Douglas Elliman report indicated that there were over 4,200 vacant apartments in Brooklyn as of September, which is 181.2% higher in comparison to last year. Median rents fell by 1.7% to $2,949 from $3,000, year to year. The percentage of new leases with concessions attached also grew, up to 48 percent last month, compared to 34.6% in September 2019, as per the report.
The Coronavirus pandemic has also left its mark on major property sales, bringing down the value of the city’s biggest 25 deals by close to 40% during the first half of the year, in comparison with the year before, as per a Crain’s analysis of data from Real Capital Analytics. Midsize deals are slowly starting to pickup, including the $40 million purchase of 24-02 Queens Plaza in Long Island City by Botanic Properties.