In the 1960s, New York City’s East Village was not the neighborhood it is today. In fact, in 1965, a Newsweek writer instructed those looking for the East Village to “head east from Greenwich Village, and when it starts to look squalid, around the Bowery and Third Avenue, you know you're there.”  But we recognized the potential for gentrification in the neighborhood and acquired 85 Fourth Avenue, a full blockfront property of 156,465 square feet. The building has 158 apartments and 16,500 square feet of ground floor retail space, plus a garage.  With investment, management focus and patience, we recognized a significant opportunity to generate steady cash flow.

We applied a three-pronged approach to this asset:  maintain very modest levels of debt, upgrade infrastructure, and renovate and modernize apartments when the opportunity arose. We recaptured the prime corner retail space and upgraded the quality of retailers to reflect the needs and tastes of the changing neighborhood.

With a persistence that has endured over five decades, we have transformed 85 Fourth Avenue from a marginal property into a core asset. By improving an average of five to ten apartments per year, we were able to steadily increase the rent roll. Over time, commercial tenants were also brought up to market levels. With multiple income generators – residential, retail, service and entertainment – we have created a property that delivers significant cash flow and diversified risk exposure.