Bought in 2012, selling now at 100+mm dollar loss

10y up nearly 2.5%. If you bought at 3.5 cap and are selling at 5.5 cap, it can do it despite increase in NOI (rents increaed which are partially offset by increased real estate taxes and maintenance expenses).

Then depends on how much they projected in terms of popularity and rent increases in that area. Brooklyn took away a lot of Manhattan growth while Manhattan got stuck with Real Estate tax increases.

Now they are not so new any more. Did they maintain well or just kept pocketing the money set aside for capex?

https://www.cnbc.com/quotes/US10Y

>> What accounts for their decline in value?

Questionable investment decisions?

Here’s their 2012 news release indicating 710 apts at $3,924 average rent and 95.6% occupancy. That adds up to a $32M in gross rent. On a $635M purchase, that’s a 5% gross cap rate. So probably 3% net cap rate at best, but probably more like 2.x%. What could go wrong?

https://ir.udr.com/news-events-presentations/press-releases/news-details/2012/UDR-Forms-Second-Real-Estate-Joint-Venture-with-MetLife/default.aspx

Rents in the buildings seem up ~50% since then, in line with SE Rent Index and BLS stats for rent in the NYC area.

Rents are higher now than when Met Life purchased the buildings. My speculation is that Met Life has placed mortgages on the buildings and is selling them subject to the mortgages rather than free and clear of mortgages. That would account for the lower asking price.

Prob an overestimation of what value they could add to the area back when the development was conceived. Overestimated the Whole Foods Effect too. New rental buildings in various residential areas of midtown make moving to the upper 90s less necessary for young midtown office-goers.

Nada, Little secret from your link. 421A tax abatement in building built in 2009.

I love me some 421A abatement, they make my cap rates look so good!

Picking this one available apartment: https://streeteasy.com/building/808-columbus-avenue-new_york/23l?
interesting to see the price history from 2011, including the games they play up and down, and the impacts of Covid, and when the big bumps happen.

I looked for a minute to try to find the original terms of the deal. But here's an article from the wsj when the purchase took place in 2012.

https://www.wsj.com/articles/BL-METROB-14534?st=JdjiZ3

I looked for a minute to try to find the original terms of the deal. But here's an article from the wsj when the purchase took place in 2012.

https://www.wsj.com/articles/BL-METROB-14534?st=JdjiZ3

The link Nada posted has more details than this.

>> interesting to see the price history from 2011

Interesting indeed. Thanks for digging it up.

I posted this with nada in mind.

To your original question, while it is hard to put precise value on 421A abatement without knowing exact details of the abatement, let us say it was a full abatement for the first 10 years and nothing else. At roughly 1-1.25% real estate taxes of the property value, it will lead to around 10% reduction in price upon expiration.

This plus interest rate increase impact (offset by increase NOI ex real estate taxes) of say net 10% likely explains a large portion of the price decline.

Other factors could be the buildings getting older and current owners likely never had to spend the money they put aside for Cap Ex reserve.

Since everything is more or less come to a halt in New York City real estate, hopefully just for the rest of August. Here's another interesting article on 'what can go wrong in real estate?'

So much for alternative investments! It always surprises me when I see people entrusting so much of their net worth and to these kind of schemes.

https://www.cnbc.com/2025/08/18/yieldstreet-real-estate-bets-customer-losses.html

The guy in the article who considers himself "moderately financially savvy" yet lost ~$400k on RE investments via Yieldstreet works at... wait for it... Fannie Mae. And invested in a deal related to Adam Neumann -- after the WeWork debacle. So, perhaps not so savvy. But, he's just the rental donkey here. Meanwhile Yieldstreet "...seeks to recoup value for investors, sometimes by raising more funds from members." -- which if they were raising funds from new members is generally the definition of a Ponzi-like scheme. CNBC will be able to open a whole new cable channel reporting on these stories 24/7 once every nitwit with a 401k can "invest like the 1%". Ha. Ha.

Yes, the Adam Neumann reference made me do a double take and make sure I read that correctly!

This really puts the lie to all the stories about how Rent Stabilization is causing a crash in building values when the same thing is happening to free market properties.

What about a modification to the rent stabilization law that allows landlords to bring rents to market when a tenant moves out? But affording current tenants limits on increases similar to current rent stabilization policy?

What about a modification to the rent stabilization law that allows landlords to bring rents to market when a tenant moves out? But affording current tenants limits on increases similar to current rent stabilization policy?

Keith, Elected politicians want more units of public housing. So any thing which permanently removes units wouldn't be acceptable. They just have to increase the renovation allowance (call it add $15k project management allowance per unit for the owner in the renovation cost) and implied cap rate by allowing larger rent increase due to renovation. After all interest rates have gone up since 2019 and the legislation went too far against owners in 2019. The second is include higher increases at vacancy (say 10% rent increase) and eliminate generational transfers completely.

What about a modification so that every time a new tenant moves into a market unit it becomes rent stabilized as long as that tenant remains in the unit?

@30. Hmm... possibly yes, as long as it's that tenant (and maybe the wife/husband) only. No 'inheritance' rights just because you happened to live there.

30, that sounds good to me. However, when the tenant moves out, I think the owner should have the ability to set the rent to the current market.

= prioritization of a certain type of tenant by the landlord who wants quicker flips to keep to "market rate".

Aaron2,
Absolutely

Keith,
It's still a "market" unit

Rinette,
We are already seeing that. In Stuyvesant Town most of the renovations are to units only suitable for roommates (no real living room).