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My team and I often get asked: who are the buyers and sellers, and are deals actually getting done? Transactions are happening but there are more obstacles than ever before. Our team has taken on a record amount of new inventory and the pace seems to be increasing each month. The motivation behind new inventory is driven by maturing or rollover debt, sellers not seeing a path to profitability, inability to complete or pay for compliance mandates, and general management fatigue. Rent stabilized buildings aren’t selling themselves. The broker, as well as the client, has just as much to do with what gets sold as the building itself. Proactive, prepared, educated and motivated sellers will get to the finish line. Complacent sellers…not so much. There are four things’ sellers should be aware of: timing, pricing, due diligence and obstacles outside of your control. Plan ahead – everything takes longer than it should.


From start to finish a sale takes on average six months. More motivated sellers can do it faster, but patient and/or inexperienced sellers tend to take longer. It takes 2-3 months to find the buyer, one month to get through contract and due diligence, and another three months to close. This is just the average – we can get lucky and find a buyer very quickly at a competitive price but more often than not, it takes a marketing process to flush out false starts, re-trades and issues neither buyer nor seller foresaw.


Know your market and understand what you own. In a rising market you can price a building 10-15% above its true value. In a flat market 5-10% is probably best. In a declining market 5% would be appropriate so you don’t end up chasing a ball downhill (think of what happened in early 2022 when rates were rising rapidly – clients are still telling me: “I should have”). Variables that impact pricing include, but are not limited to: location, condition, average rent, free market / preferential rent component, percentage of retail income, collections, immediate cap ex required, cap rate, and price per unit. Each building is unique and has its own story – that’s what makes my job fun!

Due Diligence

This includes everything from the skin, bones and arteries of the building (roof, facade and all piping) to the paperwork proving the legality of the rents. To set yourself up for success, plan ahead. Assume a buyer will ask you for everything. Here is a list of things you should have prepared prior to marketing the building.

  • Full tenant files going back as far back as possible, not just current leases.
  • All retail leases and proof of payment (inclusive of tax reimbursements).
  • Deregulation paperwork including the last rent stabilized lease, contract invoices and cancelled checks.
  • Cases By Building Report – No Rent Overcharge “Granted” on your record.
  • Properly filed and up to date DHCRs and RPIEs.
  • Arrears report and legal stipulation documentation.
  • 5 year insurance loss run history.
  • List of apartments that have been XRF tested and remediated for lead.
  • T12 income and expense statement.
  • Local Law 11 report from your engineer (if applicable).
  • Payroll schedule.

Obstacles & The Unknown

Your broker’s job is to flatten the speed bumps in the road and shine sunlight where there is darkness. The more you know, the better. Same goes for the buyer, their mortgage broker, and attorney. Instead of thinking you are on opposite sides of a negotiating table, use a round table – there are no sides – you are all working together with a common goal of getting to the closing table. In 2009 when I started in the business, I learned a valuable lesson: problems don’t kill deals – surprises do. 15 years later and it still holds true. We don’t know who the buyer will be but putting yourself in a position to have multiple buyers to chose from will be very helpful. We often send a buyer a contract and then he doesn’t return our call for a week. Every transaction is a chess match, and your broker should be proactive and thinking two or three steps ahead with a balance of offense and defense.

Rent stabilized buyers are extremely picky. They are taking the “wait and see approach”. These buyers are looking for the cleanest, best located and cheapest deals. Buildings with super low rents are extremely difficult to sell because even at $80,000 per unit, they are still priced at neutral leverage without a path to profitability. When expenses increase at a faster rate than RGB limits it would be much more advantageous to buy a buying with $1,700 rents rather than $1,200 rents. Sellers debating between selling now and next year should consider that 2025 is a mayoral election year and someone might have their thumb pressed down on the RGB board’s head. Assume we will get a 1% increase next year and be pleasantly surprised if it’s better than that.

Lead remediation laws will be in full force and effect in 2025 and fines will start to be assessed. Some buyers are picking up on this and asking the right questions. For owners who haven’t spent any money on cap ex in recent years and are thinking of when to sell, I would suggest they do their due diligence. Research what prices are like today for buildings with high violation counts, old boilers and no XRF testing and generally no money invested back into the building since HSTPA. These buildings are like quicksand – do yourself a favor and get out now before you can’t. Unfortunately, the incentives don’t line up and more buildings will end up in this category as time goes by. As the supply of these buildings grows the prices will go down. Just ask anyone who was around in the late 1970’s. Lower interest rates alone will not save this niche of buildings.

What You Should Do

I’ve noticed that most sellers aren’t as prepared as they should be. Their body language and actions seem to say: “you’re asking me to do a bunch of work to sell a building for a price I don’t like”. Admittingly, it’s not very motivating and I understand why sellers drudge through this but it’s the only way to get max proceeds in 2024 and will probably be amplified in 2025. There are many variables to consider before deciding when to sell. READ THIS. Formulate your own opinion on the future and then decide what ‘s best for you.

Brokers and buyers will spend the most time and effort on deals with the most motivated sellers. Every recent transaction, irrespective of quality or size, has required a price reduction. If you haven’t done that yet, that’s your first step to signal to the market that you’re paying attention and you’re motivated to transact.

What’s Next

The Fed’s stance on interest rates at their June meeting leaves investors to believe that a rate cut is near. How much and how soon – it’s too early to tell. There is going to be a ton of new inventory coming to the market as the year matures. Super cheap five year debt originated in 2020 through early 2022 is going to start to roll over in 2025 and reset to today’s rates. That’s going to lead to more reluctant sellers who have spent the past five years saying, “I’ll wait for a better day.” Other forms of inventory sellers should be aware of include foreclosures, note sales from distressed regional banks, and the Signature Bank markdown and workouts which will reset valuations for similar buildings with different lenders. Some buyers might be in a position to decide between saving a building they already own or buying the one you’re trying to sell.

If you’re a frequent reader of these articles, you’ve heard me repeatedly remind you to be proactive and that hope is not a business plan. Think with the end in mind and then work backwards.

We are working towards the perfect storm for transaction velocity – be prepared for a very busy end of 2024. The New York Multifamily Team is ready. Contact us so we can help you get ready too!

Seth Glasser

(212) 430-5136 | | Seth Glasser is a Partner at NYM Group.