New Owners of Cherry Street Complex Lock In Affordability For 40 Years (Updated 12-23)
We have more information this afternoon about the sale of Lands End II, the affordable rental complex on Cherry Street.
As reported a couple of weeks ago, an investment group including L+M Development Partners, acquired the twin 26-story towers for $279 million. It’s the biggest sale price recorded on the Lower East Side in a very long time. Yesterday, the City Council’s committee on Planning, Dispositions and Concessions heard more about the transaction. Representatives of the city’s Department of Housing Preservation and Development asked the Council to approve a new contract enabling the buildings to stay in the federal Section 8 subsidized housing program and they asked for a technical change in the complex’s tax exemption status. Members of the subcommittee voted in favor of the application; passage from the full Council is assured.
In practical terms, the news is very good for the residents living in 490 apartments at Lands End II. The new contract has a 40-year term, meaning tenants have some peace of mind they have not enjoyed in the past. City Council member Margaret Chin was on hand for the hearing. She helped facilitate a meeting between L+M and tenant leaders during the past week. “This is a very exciting project that assures affordability for at least the next 40 years,” Chin said.
L+M is taking the management lead but has other investment partners. Until recently, the company did not have a high profile on the Lower East Side, but it is becoming a major player. L+M is one of three firms awarded the contract to build Essex Crossing, the mixed-used project on the Seward Park site.
Representatives for L+M did not respond to our requests for information concerning Lands End II.
UPDATED 12/23: The silent partner involved in the acquisition of 265-275 Cherry St. has now gone public. In a news release, the CIM Group acknowledged its collaboration with L+M and Citi Community Capital for the purchase of Lands End II. More from the release:
(The acquisition) represents a rare opportunity to invest in a stabilized, high-quality residential asset that has been institutionally-maintained, and is located in Manhattan’s burgeoning Lower East Side neighborhood. The new ownership will ensure that the property maintains its designation under the Section 8 program… The Lower East Side is a vibrant and diverse community rich in history that has attracted significant investment over the past several years. CIM identified the Lower East Side as a qualified community that possesses the attributes that fit CIM’s investment model, which focuses on urban districts positioned for economic expansion with solid infrastructure and transportation networks.
CIM has been on a New York City spending spree in the last few years. Lands End II is the company’s first property on the LES.