Bronx, NY – Less than a year after snapping up the debt on six troubled Bronx apartment buildings, the Bluestone Group is quietly marketing the portfolio’s mortgage with a price markup of 60%, sources said.
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The firm’s purchase of the debt on the buildings last spring for about $10 million worried tenants, housing advocates and city officials alike. They insisted that the price was too high and that Bluestone would have to skimp on much-needed building repairs. The buildings had already cycled through two owners who had overpaid for them and were not able to maintain the properties. At the time of the Bluestone deal last year, the buildings had 2,936 violations.
A spokeswoman for Bluestone denied Wednesday that the mortgage on the properties is for sale. .
Bluestone principals told Crain’s in July that they had not overpaid and that they were committed to turning the buildings around.
Less than a year later, sources say the firm appears to be moving on. Bluestone has approached several prospective buyers and told them it is asking around $16 million for the debt, according to sources. They also say Bluestone has told them the sale comes after the company spent about $1 million on repairs.
“This illustrates that they never had a long-term commitment to this portfolio and that they never intended to turn it around,” said Dina Levy, director of organizing and policy for the Urban Homesteading Assistance Board.
The Bluestone spokeswoman also insisted that the group has spent more than $1 million fixing up the properties, adding that the $1 million figure “was laughably low.”
Read more in Crain’s NY
Follow up photo should be from the top down to symbolize the rise and fall.
They are in the business of making money, not urban and social renewal. If they can flip the buildings quickly and make a nice profit, they should take the money and run. If there are some philantrophic organizations who want to invest in these buildings for the purpose of making peoples’ lives better, than thats a totally different model.
Welcome to ObamaLand where making money is illegal or at a minimum “shady”.
Cool!! They bought at 10 and are selling at 16, How do I get in touch with them to invest?
What a great time to step into this market. Timing is everything. Its always nice to see success thru hard work. Kudos! and keep it up guys!
i wish i had done that. would pay for my student loans
kol hakavod
Welcome to Russia!
Keep it up! Jealousy is the biggest sign of success!! A profit of this magnitude is incredible in any market, let alone a down market.
This is actually a huge problem in the Bronx and it affects the Jewish neighborhoods, too. Speculators buy apartment buildings — and even individual units in co-ops — and pay too much given the rents they can collect, and as a result don’t have the money to keep the properties even in the minimum condition required by law.
Reply to #3 and #7
We have here two rocket scientists fulminating about things about which they know little. The city has no problem with landlords making money – it means more income to everyone, including the city. The public advocacy groups have been around since World War II, and everyone who is a real estate pro knows their agenda and how to deal with it. The issue is undercapitalized landlords who run their business backwards, starting from how much they need for personal expenses, and then figuring out the maximum they can offer to run their buildings. This usually leads to deferred maintenance and inadequate service. I have many clients with apartment houses, and the ones that make money are the ones that spend money – even in the Bronx. There is no requirement for a landlord to provide social services – just adequate heat and timely repairs. It is regrettable that some owners don’t agree with this basic tenet of running an apartment house. None of us knows the specifics of what’s going on with the Bluestone “offer.” If they find a greater idiot, good for them! And Obama has nothing to do with it!
You guys all know nothing. Google blustone and you will see these guys have been buying and stabilizing buildings for over 2 years. They obviously know what these things are worth and bought it at a great price.
Why can’t one jew be happy for another jew when he makes some Gelt. I happen to have a friend who did some work in some of these buildings and he said there was dozens of workers gutting out the place. Problem is if you put in a million they want 2 million!
So Bluestone buys the note fixes up the properties and then sells it. What’s wrong with that? Sounds like a nice ethical business strategy to me.
So Bluestone buys the note fixes up the properties and then sells it. What’s wrong with that? Sounds like a nice ethical business strategy to me.