Landlord Sells NYC Real Estate Stake at Loss After Rent Freeze Vote

An investment firm affiliated with a Google co-founder sold its stake in a New York real estate fund back to the manager for about six cents on the dollar, according to documents filed in December. The fund holds nearly 5,900 units. The gross value of the stake was roughly $79 million before the sale.

The city's Rent Guidelines Board voted 7-1 on Thursday to freeze increases on one million rent-stabilized apartments. Landlords have warned the freeze could accelerate sales or reduced maintenance, citing earlier state laws that limited rent increases and higher operating costs.

" — A&E spokesperson, reported by The New York Post.

The manager of the fund confirmed it bought out one long-term investor but did not name the seller. Operating expenses at the company have risen 78.5 percent over the past decade, and it carries $84 million in unpaid rent arrears. The company said it has spent more than $800 million on capital improvements across its portfolio and cleared 35,000 building violations.

City housing officials have sued the company multiple times over conditions including mold, bedbugs, and broken pipes. A $2.1 million settlement was reached earlier this year to address hazardous conditions in 14 buildings. A university reported writing down the value of a $115 million investment in the fund by 50 percent last year.

The seller had moved multiple limited liability companies out of California after that state considered a one-time tax on large asset holdings. Two ballot initiatives aimed at repealing the proposed tax were later launched by the same investor.