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International Property

New York-listed Equity Residential seeks buyer for two Manhattan buildings amid softening rental market

Equity Residential, founded by billionaire Sam Zell, is trying to curb its exposure to Manhattan’s West Side, where rents have been subdued in recent years because of new flat supply

PUBLISHED : Monday, 17 September, 2018, 9:00pm
UPDATED : Monday, 17 September, 2018, 9:00pm

Publicly traded landlord Equity Residential is marketing two Manhattan apartment buildings, and just completed the sale of a third, as it seeks to reduce its holdings in a rental market that is softening.

The Chicago-based real estate investment trust is looking to sell 800 Sixth Ave, a high-rise tower in Chelsea, and 505 W 54th St in Hell’s Kitchen, according to a source, who asked not to be identified because the matter is private.

New York-listed Equity Residential recently completed the sale of 101 West End Ave, a 506-unit building between 64th and 65th streets, for US$416 million to a consortium including Dermot, Dutch pension fund PGGM and USAA, according to Steve Benjamin, Dermot’s chief executive officer. Over the next several years, the buyers plan to upgrade the property, the second rental the group has bought in Manhattan this year.

Marty McKenna, Equity Residential’s head of investor relations, did not have a comment. PGGM and USAA did not immediately respond to requests for comment late on Friday.

Equity Residential, founded by billionaire Sam Zell, is trying to curb its exposure to Manhattan’s West Side, a wide swathe of the borough where rents have been weighed down in recent years by a glut of new flat supply, David Neithercut, the Reit’s outgoing chief executive officer, said on a July conference call with analysts.

He said the company was listing one building for sale in the area as “an opportunity to address the negative impact in our New York City growth rates”.

The property at 800 Sixth Ave, between 27th and 28th streets, was built in 2003 and has 266 units, according to Equity Residential’s annual report. Amenities at the tower, where a two-bedroom is listed for US$7,200 a month, include a rooftop deck with panoramic city views and a putting green, according to the rental website.

The 54th Street building, at the corner of 10th Avenue, was constructed in 2001 and has 222 flats. Available studios start at US$2,985 and one-bedrooms start at US$3,615.

Cushman & Wakefield brokers Douglas Harmon and Adam Spies are representing Equity Residential and declined to comment. The sales team has also been hired by rival landlord AvalonBay Communities, which is marketing a 50 per cent stake in seven of its Manhattan properties, including one each in the West Side neighbourhoods of Chelsea and Morningside Heights.

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