Four local apartment complexes, several of which were sources of frequent complaints over management, have reportedly been sold for over $80 million.
“I am happy to report that just this last Friday, the E&M properties in Kingston were purchased by the Aker group,” said Kingston Common Council Majority Leader Rennie Scott-Childress on Tuesday, February 2. “This is wonderful news because we’ve heard some disturbing things about the prior management of these properties.”
The properties include Kingston Waterfront, 111 Hudson Landing Road, Kingston; Stony Run, 305 Hurley Avenue, Kingston; Lakeshore Villas, 557 Broadway in Port Ewen; and Black Creek Apartments, 30 Black Creek Road, Highland.
Scott-Childress expressed optimism about the new owners, explaining that the principals grew up in the Hudson Valley.
“Most excitingly is the funding was crowdsourced by some 200 Hudson Valley residents,” said Scott-Childress. “Aker has pledged to both significantly renovate the Kingston properties, which have been poorly maintained for decades, some of which are downright unlivable, and gear the rent structures towards workforce housing rates.”
Esopus Town Supervisor Shannon Harris also had good things to say about the new ownership.
“They’re young, they’re eager to deliver good customer service and make repairs to some of the amenities at these locations and they’re already sending surveys to the residents,” said Harris. “They care about what they think, they care to understand what some of the biggest complaints are and to resolve them. They seem much more responsible and I’m hopeful that we’re finally going to see the swimming pool at Lakeshore Villas put back to use.”
Harris said that E&M Management closed many amenities that it advertised as available at Lakeshore Villas, including the pool, laundry facilities and gym. Additionally, she said E&M began converting yearly leases to monthly leases and evicting residents who complained.
She said there were issues at Black Creek Apartments as well.
“By all accounts I don’t think the renovations were up to the quality that they should have been and also throughout the renovations they ignored safety concerns, shut people’s electric or gas off at a moment’s notice, demanded everyone give their keys and they could enter at any time, didn’t give people a courtesy or… they didn’t communicate well,” said Harris.
While local elected officials seemed optimistic, Kingston resident Alex Panagiotopoulos expressed concern at the Common Council meeting, citing statements made by the new owners while drumming up investor interest.
“For you to say the Aker property buying up Stony Run, Kingston Waterfront and a number of other properties around Kingston and becoming Ulster County’s largest landlord is a good thing, is utterly, utterly ghoulish,” said Panagiotopoulos. “In the developers’ presentations, which are available online, they say all the units are currently market rate and according to documents the buyers plan to renovate more than half of the apartments over a 32-month period, raising the rents an average of $428.”
Real estate news site The Real Deal offered more details on the sale in a January 29 article, After big upstate push, multifamily heavyweight E&M cashes in chips. It gives a sale price of $81 million (a $26 million profit) and says the total number of units in the four complexes is approximately 500. It cites “sources with knowledge of the deal” and, like us, was unable to reach Aker or other parties for official comment.
The article says Aker’s partner in the deal is investment firm Pearlmark, and that buyers raised $21.8 million on Crowdstreet, a crowdfunding platform that lets individuals make small investments in commercial estate. (This is what Scott-Childress was referring to.)
The article’s subhead echoes a point local advocates for rent-control/stabilization have been trumpeting: “Properties escaped rent regulation, drew investor interest instead.” It says the company “fended off an attempt in 2019 to place some units in the portfolio under rent regulation,” referring to an effort by the city to enact rent-stabilization that was eventually scrapped after a survey of landlords found the rental in the city had a vacancy rate of greater than 5 percent, and thus was not eligible. Posts on the Kingston Tenants Union Facebook page have called the veracity of the numbers in that survey into question, with the most recent post highlighting a line in the The Real Deal article that reads: “According to the marketing materials, the new owners plan to sell the properties to the next buyer with ‘meat on the bone’ — i.e., the possibility of raising rents further.” The Tenants Union concludes, “this is just a short-term play for them.” (These appear to be the marketing materials cited.)
Sunset Gardens to be sold too?
The article also states that the 217-unit Sunset Gardens in the town of Ulster, another E&M property and the source of some of the most public complaints, is also in contract to be sold for $34.5 million. But that deal hasn’t gone through yet.
“We understand there was a sales transaction involving portions of the E&M portfolio,” said Town of Ulster Supervisor James Quigley III. “The town of Ulster has no notice of a transfer of Sunset Gardens out of E&M Management’s ownership.”
Quigley also said there have been problems with the management at that property. He said tenants report everything from water leakage, sewer failures and bugs to new leasing issues.
“There was a nice, quiet peaceful community up until the point that E&M purchased the property and the management change was drastic,” said Quigley. “People didn’t react to it very well. I know a number of tenants moved out and ended up buying houses after living there for six years.”
Read a past response to similar statements by E&M Management here. A request for comment sent Friday afternoon, February 5 was not answered.
Additional reporting by Will Dendis.