Harlem Portfolio Sells at Twice Acquisition Price

A real estate industry veteran, Paul Salib is founder and managing principal at Castellan Real Estate Partners based in New York City. Paul Salib’s firm actively began acquiring real estate properties in 2009 with the goal of taking advantage of depressed asset prices brought about by the financial crisis. Castellan continuously seeks properties that provide long-term value and practices responsible property management. 

In 2013, it purchased three properties in Central Harlem for $20.3 million. The three contiguous mid-rise multifamily buildings are located on West 141st Street between Lenox Avenue and Adam Clayton Powell Jr. Boulevard and comprise a total of 144 residential units. Castellan invested in capital improvements including boiler conversions and modernizing intercom systems, among others. 

The firm also rectified numerous New York City Department of Buildings code violations relating to the properties, while Central Harlem continued to experience growth during this time. In early 2016, Castellan sold the three properties for $42.1 million, or more than twice the acquisition price or around $290,000 per unit, translating to an increase in value of 107 percent.

Three Tips for Investing in New York Real Estate

Real estate investor Paul Salib serves as managing partner of Castellan Real Estate Partners, a firm he founded in New York City in 2006. In this capacity, Paul Salib pursues a broad range of debt and equity real estate transactions throughout New York and beyond. 

Since its early days, New York City has played host to one of the most diverse real estate markets in the world. Here are three tips to help you get started as a New York real estate investor:

1. Find the right location. It may be tempting to find an investment property in a well-established area, but these markets are often saturated from a development perspective. For this reason, many investors instead look toward neighborhoods with high potential for growth. 

2. Compare sales and rents. A comparison between the sale price of a property and average rents in the area may provide a nuanced look at the property’s value. Investors often look to buy low in a high-rent area, particularly if they plan to rent the property for an extended period of time. This advice applies to investment properties in any market, but New York’s high rent makes it especially important to consider. 

3. Maximize bedrooms. If investors plan to rent their investment properties, they should almost always try to maximize the number of bedrooms in the unit. Renters typically pay by the bedroom, regardless of how small the bedroom may be.