Jackson Heights Life

I remember reading an article about the sale of this real estate portfolio earlier in the year.  I believe there may have been a write up in The Real Deal.  I also recall comments from a few of the affected tenants claiming that the original landlord, Haros, is a slumlord, in every sense of the word.

Here's a Courier article from March 2006 on Nicholas Haros.  When the possible sale of his numerous properties were announced early last year, I remember there being expressions of relief from a lot of his tenants.  It's sad to see them having to face possible eviction after living in poorly maintained apartments to begin with.

http://www.queenscourier.com/articles/2006/03/02/headline_news/news04.txt

The Queens Vantage Tenants Council has started a new blog that focuses on the businesses practices of Vantage and works to organize their tenants.

This was the Vantage Corp who was harassing tenants.
see article::


Queens Tenants Rally Against Abuse

 
Sen. John Sabini speaking at a rally for tenant’s rights Saturday in Manhattan.
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By Noah C. Zuss


Mistreated tenants from several buildings owned by Vantage Properties, LLC gathered in Woodside on Saturday then rallied in front of the Manhattan offices of Credit Suisse, a major Vantage financier to draw attention to abuses they have been subjected to in rent–stabilized buildings in Western Queens. Residents in the rent-stabilized apartments claim routine harassment and abuse was meant to force them out in favor of market rate tenants.

Many claim they have been exploited and forced to move through forced eviction.

Renters say they have been harassed through groundless legal proceedings designed to intimidate them, and have received inferior services than newer tenants who live in renovated apartments, in attempts to force out the rent-stabilized tenants. Some have had their checks returned for unfounded reasons, and were threatened by landlords because of their immigration status.

Now State Senator John Sabini (D-Jackson Heights) has joined their fight. He recently secured a $15,500 state grant to provide free legal assistance to tenants directed to the Immigrant Tenant Advocacy Project, a program of the Catholic Migration Office, a nonprofit advocacy group. The project operates under the umbrella of the CMO and provides free legal counsel to tenants in Brooklyn and Queens to improve living conditions.

The lead attorney for the project, Robert McCreanor said the “general mission is to make sure people don’t get exploited. What we’re trying to do is keep people in their homes and protect their rights.”

Senator Sabini said he got involved soon after he found out such a large corporation was buying up buildings in the area.

“When you find out such a large number of buildings have been purchased, it made me take notice,” Sabini said. It’s a large number of buildings and it can affect the quality if life in Western Queens. We decided we needed to alert people and get some money out to help them.

According to Steven Stites, Communications Director for Senator Sabini’s office, Vantage’s dealings have been suspect since the group first began purchasing apartment buildings in Queens. He said Vantage’s “business plan was to force out rent stabilized tenants in favor of new ones, and in some cases threatened their immigration status or used spurious reasons to evict tenants.”

At the Sabini announcement on Sunday, which followed the tenants’ rally on Saturday where tenants protested Credit Suisse, a Manhattan bank that is a major partner of Vantage, Sabini said he was behind the aggrieved tenants. “I am concerned about the stability of our housing stock that this transaction might have,” he said. “They are trying to change the face of our neighborhoods by evicting rent-paying, hardworking people who are the fabric of our community.”

In addition to advocating for themselves, several tenants filed a consumer protection lawsuit against Vantage declaring their position.

Since its founding three years ago, Vantage has purchased nearly 10,000 units of rent-regulated apartments throughout Western Queens. Most are in the neighborhoods of Jackson Heights, Woodside, Corona, Elmhurst and Sunnyside. The company also owns large units in Washington Heights and Harlem.

In 2007 some tenants rejoiced when Vantage bought over 50 properties with almost 2,000 units from infamous slumlord Nicholas Haros. Many were relieved when the sale occurred, but soon found that Vantage’s financial plan included evicting them from their rent-stabilized apartments.

Just one example of the harassment is that of resident Khursh Mian, a resident of Jackson Heights. Vantage returned the check of Mr. Mian, a resident of the neighborhood for 36 years by sending his check back because it included his wife’s name. “My wife’s name is on the lease,” Mian said. But Mian, a police officer and fluent English speaker, was undeterred and not so easy to intimidate. “If they tried to do this to me – a U.S. citizen who knows his rights – I can only imagine what they will do to people who don’t.”

Attorneys with the CMO, a Brooklyn-based nonprofit and the
recipient of the grant, have already provided counsel to many tenants already facing eviction and the grant will allow them to offer aid to many more tenants.

“We are providing free legal services and community organizing to tenants in neighborhoods throughout Brooklyn and Queens,” said Mr. McCreanor. “We are very concerned about the patterns of harassment and the displacement of working class and immigrant families from their homes.” McCreanor estimated that in some buildings up to 30 percent of tenants have been evicted in the past year.

GlobeSt.com
Two Queens Apartments Shed for Nearly $20M
By Natalie Dolce
July 23, 2008


QUEENS, NY-A five-story, walk-up apartment building at 92-01 37th Ave. in the Jackson Heights section of Queens changed hands in an all-cash transaction valued at $7.7 million. Also, a six-story, elevatored apartment building at 86-11 Whitney Ave. in the Elmhurst section of Queens was sold in an all-cash transaction valued at $11.2 million. Massey Knakal Realty Services represented the sellers in both transacations.

The five-story 94-foot by 89-foot property at the northeast corner of 92nd St. and 37th Ave. contains 46 units--three studios, 35 one-bedrooms and seven two-bedrooms--and six stores over approximately 41,830 sf. The building is two blocks from Roosevelt Avenue and Junction Boulevard near shopping and the 7 subway line.

Massey Knakal broker Swain Weiner tells GlobeSt.com that the buyer is Queens-based investor, Clearview LLC. He explains that Clearview was attracted to the combination of retail and residential "in a thriving area of Jackson Heights." The seller he notes, is Blue Star LLC, and is selling the property because "he is an active investor."

The transaction, which Weiner says had more than 20 offers, occurred at a capitalization rate of 7.06%. The property sold for $184.08 per sf. He notes that the property is a "great piece in an area that only grows in population. The buyers will work on improvements in the building and subtely increase the top line revenue stream."

Some months ago I posted regarding the 8410 34th Avenue building which is falling apart.  I heard a few days ago from a neighbor that one of these corporations (possibly Vantage?) will be fixing up the property next year.  They have done a wonderful job with the exteriors of two neighboring buildings which I heard were in similar disrepair until recently.  While, I do feel sorry for the rent controlled tenants mentioned in the article, this is a common problem whether the unit is owned by a private individual, sponsor, co-op board or corporation.  Owners simply don't want to put a lot of money into a unit that they are getting so little return on.  However, if the tenants can organize that is in their best interest.  Also, if the disrepair effects the new "market rate" / higher paying tenants that may be a catalyst for the corporation to repair all units. 

I live in one of the Vantage Buildings in JH.  I just moved here a year ago....and although i pay the market rate on my apartment....I MUST SAY that Vantage has been HORRIBLE in replying to any maintenance request I have done through their customer Service number.  Last year i had a horrible leakage and after two weeks of requesting someone to come and fixed it...WITH NO AVAIL....i decided to call 311.  When a NYC Housing Dept called them up to say that they MUST FIX the problem or face possible fines....that's when they finally came to fix it.  I do urge residents that if they have a problem.....CALL 311.  Tell them you need to make a complaint against your landlord.....and IF they are legally required to fix a problem....the NYC Department of Housing Preservation will make sure that is taken care of. Tenants have rights....and it is important that tenants make themselves aware of these right.  Call an ask to have some help you.   Also... you can look at their website...

www.nyc.gov/hpd

http://www.costar.com/News/Article.aspx?id=F77032D365F8F633E4318444366465F1

Threatened Legal Action Over NYC Rent Control Likely to Roil CMBS Market
Hundreds of Millions of Dollars and Multifamily Value Strategies At Risk by NY's Plans To Sue Major Landlord

February 3, 2010
 
Another half a billion dollars in CMBS debt looks even weaker this week after New York Attorney General Andrew M. Cuomo announced his intent to sue Vantage Properties LLC, a major New York City multifamily landlord.

Cuomo sent a five-day notice letter to Neil Rubler, the president of Vantage Properties, notifying the company of the Attorney General's intent to commence litigation against the firm. The action is an attempt "to stop [Vantage] from harassing tenants in rent-regulated apartments and to obtain monetary damages for tenants who have been victimized," the Attorney General's office said in a prepared release.

Since March 2006, Vantage has purchased more than 125 buildings containing more than 9,500 apartments throughout Queens, Harlem, and Upper Manhattan - almost all of which are rent-regulated. The Attorney General's threatened legal action alleges that Vantage is pursuing a strategy to generate turnover among long-term, rent-regulated tenants, and impose significant rent increases on new tenants in order to increase profits.

The Attorney General said the threatened legal action is part of his office's ongoing efforts to enforce laws that promote access to affordable housing for low and middle income New Yorkers.

In a statement, Vantage Property said: "Vantage is genuinely committed to serving its residents and to the future of affordable housing in New York City. We look forward to demonstrating this to the Attorney General."

The issue of converting controlled rents to market rate rents has been in the spotlight since Tishman Speyer and Blackrock missed loan payments last fall on their jointly owned Peter Cooper Village/Stuyvesant Town, a 56 multi-story building complex in New York City containing 11,200 units. The joint venture gave the keys back to the lender on the property last week.

While the legal action from the Attorney General was widely reported in the major New York media this week, CoStar Group has identified $503 million in loans on more than 2,800 units of Vantage Properties' portfolio that are now held in four commercial mortgage backed securities (CMBS). This information was not previously disclosed in news coverage. In those deals, Vantage Properties financial partner was and still is Apollo Real Estate Advisors, now called AREA Property Partners.

AREA Property Partners issued a statement expressing regret that Vantage had not yet reached an agreement with the Attorney General "incorporating best practices and other tenant protections, which we fully support. We expect that Vantage will work with Attorney General Cuomo's office to get this matter resolved quickly."

According to Cuomo's letter to Rubler, an investigation by the Attorney General's office found that a major component of Vantage's business and management strategy is to generate substantial tenant turnover and commence eviction proceedings against rent-regulated tenants. Once units become vacant, Vantage's business plans call for massive renovations, which allow Vantage to charge substantially higher rents under applicable rent regulations,

"Vantage's business plans refer to this strategy of removing tenants from rent-regulated apartments to convert them to market rate apartments as the company's 'Golub program,'" the New York Attorney General's letter states. "Vantage's business plans highlight its Golub program as a means of generating tenant turnover. As reflected in Vantage's annual reports to investors and business plans, Vantage's business goals are to "generate unit turnover through active management of the Golub program and other legal efforts."

"The investigation revealed that Vantage often failed to exercise due diligence prior to serving tenants with Golub notices or other legal termination notices," the letter continued. "Vantage often commenced Housing Court proceedings seeking to evict tenants from homes in which they had lived for decades based on little more than database reports, which were often incorrect, or contradicted by other evidence in Vantage's possession."

The letter went on to say: "Indeed, the Attorney General's office review of Vantage's tenant files revealed a systemic pattern of harassment."

The announcement of the Attorney General's plan and release of its letter to Vantage has raised some concern in the real estate investment community.

"Any experienced commercial real estate operator in New York would know better than to engage in the practices alleged in the AG's letter," said Charles Cecil, partner and CEO of Opin Partners, a CMBS and real estate investment advisor and investment management firm in New York.

But apart from the allegations against Vantage, Cecil said the action also speaks volumes about the past underwriting standards of CMBS offerings.

"No doubt it reflects another attempt to turn an old Ford into a new Corvette," Cecil said. "The 'Ford' in this case, and in many others throughout New York is typically an old, not very well maintained multifamily building(s) comprised of 75%+ regulated tenancy. A large group of such buildings is really no different than a single building, but such a group may contain sufficient characteristics to render it "suitable" as CMBS collateral."

However, Cecil continued, "it would seem somewhat irresponsible (at best), to treat these the same from a credit/underwriting perspective as a new 'Corvette' such as a typical Glenwood, Moinian, Related or Rockrose multifamily property. Nevertheless, this is what has happened in any number of cases, some of which have loans that are now part of CMBS collateral."

Cecil said the Attorney General's action against Vantage will upend the business plan and value strategy of many owners of such properties, subjecting them to lender reappraisal by special servicers and potential loan losses.

As an example of what can happen to the value of such properties, Cecil noted the Stuyvesant Town and Peter Cooper Village. Tishman Speyer and BlackRock paid $5.4 billion for the 11,200 apartments in 2006.

"If, as reported, the Stuy Town net operating income is $100 million, an argument could be made that a reasonable cap rate of 7% would yield a value of less than $1.5 billion for the property now," Cecil said.

Even before Attorney General Cuomo's announcement this week about Vantage Properties, the CMBS loans backing Vantage's properties have been on the CMBS' servicers 'Watch Lists.' The servicers' statements to CMBS bondholders have pointed out issues with increasing property expenses, deferred maintenance issues and low debt service coverage ratios. (A debt service coverage ratio of 1.00 indicates that the property is generating just enough excess cash to make required loan payments.) In many cases, the amount of excess cash from the Vantage properties has not been enough to cover the annual amount owed for loan repayments, according to the servicers' notes.