Oldies but goodies: The value of long-term ownership in rent-stabilized assets - by Shallini Mehra

Active investors seeking rent-stabilized properties often gravitate toward buildings that have been held under long-term ownership — and for good reasons. These properties tend to be well-maintained, both physically and operationally, offering a level of stability and predictability that is increasingly rare in today’s market.

Typically, long-term owners employ reliable superintendents and staff who have often worked in the building for decades. These trusted teams take pride in the property, keeping common areas and basements clean and orderly. Moreover, the owners themselves are usually hands-on, conducting regular site visits and ensuring necessary repairs and maintenance are promptly addressed.

Another key benefit of these legacy-owned buildings is the minimal regulatory risk they present. Their DHCR case history tends to show fewer tenant complaints and legal issues. Because the units remain rent-stabilized, new buyers avoid the complexity and liability of deregulation paperwork associated with free-market units. Additionally, these veteran owners typically maintain thorough tenant files and rent histories, providing a smooth and transparent transition to the next owner.

The 2019 Housing Stability and Tenant Protection Act (HSTPA) has prompted many long-time landlords to reconsider the future of their portfolios. As a result, we’re seeing a wave of high-quality, long-held assets entering the market. Meridian Investment Sales, for example, recently sold a 95-unit multifamily property in Jackson Heights, a 20-unit property in Woodhaven and is currently in contract to sell a 60-unit building on Audubon Ave. — all of which had been held for 35 to 45 years.

In today’s regulatory environment, assets which have operated under long-term ownership are truly the “oldies but goodies” appealing to investors looking for stable, well-managed assets.

Shallini Mehra is a managing director at Meridian Investment Sales, New York, N.Y.