Leading New York Bridge Loan And Investment Firm Turns Striking Profit

Castellan Real Estate Partners, led by managing partner John Salib, is headquartered in New York City. With a large amount of private capital under management, John Salib’s Castellan Real Estate Partners is adept at turning profits on prime real estate properties.

Last year, Castellan sold one of its Washington Heights investments to Brooklyn’s Guardian Realty Management at a significant profit, more than doubling the initial investment. Guardian Realty paid $15.4 million for the three multifamily properties consisting of nearly 70 rental units within 10 blocks of each other. Castellan acquired the three properties in 2013 for a total of just $7.6 million, according to city records. 

The properties, all constructed in the 1920s, include 649 West 184th Street, consisting of 20 units encompassing around 18,000 square feet, 325 Wadsworth Avenue, consisting of 25 units at more than 21,000 square feet, and 85 Fairview Avenue, consisting of 24 units at some 15,000 square feet.

Castellan Real Estate Partners Acquires Sought-After Tribeca Property

Cofounded in New York by Paul and John Salib, Castellan Real Estate Partners provides a host of services spanning the acquisition, development, disposition, and management of distressed and transitional properties. In May 2017, Castellan Real Estate Partners purchased a five-story mixed-use property situated in the center of Tribeca at 90 Chambers Street for $10.7 million.

In addition to 2,175 square feet of retail space on the ground floor, the property includes five residential units, three of which are lofts, with the second, third, and fourth floors having one each. A pair of residential units spans the fifth floor. Moreover, the building has approximately 5,000 square feet of air rights.

With the property described as presenting excellent condominium conversion potential, the heavily trafficked location is one of high demand and limited supply. Recent improvements include a new roof, as well as a renovated and freshly painted facade. Additionally, each unit comes with a washer and dryer and an open kitchen with stainless steel appliances.

Emerald Equity Acquires Four Buildings in Harlem for $24.8 Million

With real estate veteran John Salib as managing partner, Castellan Real Estate Partners acquires undervalued real estate properties and renovates them to increase their commercial value. In August 2017, Castellan Real Estate Partners sold a four-building portfolio to Emerald Equity Group for $24.8 million. It had acquired the four buildings in 2013 for $13.5 million. 

The four-building group in New York City included three buildings between First and Second Avenues and another located on 1661 Park Avenue along East 117th Street. The first three properties occupy 42,000 square feet combined and feature over 70 rental units and two commercial premises. These were sold for $15.8 million. The Park Avenue building occupies more than 22,000 square feet and features 34 rental units and one retail unit. It was sold for $9 million.

According to Castellan’s managing director Etan Slomovic, the company was able to realize a significant profit from the sale because of rising property values. These were spurred by higher market activity and both public and private investment in the East Harlem neighborhood. The company’s early acquisition of the buildings four years ago enabled it to fully capitalize on the increased demand in the neighborhood.

NYC Addresses Climate Change through Carbon Challenge Program

Over the past decade, Castellan Real Estate Partners in New York has amassed some $750 million in equity- and debt-related investments. The company’s track record includes the acquisition of under-performing, often historically significant, properties in the city, renovating them in keeping with contemporary tenant-friendly and “green” practices, and reselling them at a substantial profit. Castellan Real Estate Partners’ focus on reducing the carbon footprint of its buildings parallels recent, similar efforts of New York City itself.

The city announced one particularly notable program in early 2017. The NYC Carbon Challenge for Commercial Owners and Tenants originated in Mayor Bill de Blasio’s concern about the damage climate change was inflicting on the city.

The Real Estate Board of New York is among the professional groups to join with the mayor in this effort. Other cooperating bodies include local universities, medical facilities, and hotels. The challenge aims to halt all new waste going into landfills by 2030 and reduce greenhouse gas emission levels throughout the city 80 percent below their levels in 2005 by 2050.

Because about one-third of New York’s greenhouse gas emissions originate with commercial buildings, private-public partnerships in this area are essential. The new Challenge for Commercial Owners and Tenants builds on the initial NYC Carbon Challenge Program effort launched in 2007.

Castellan Sells Washington Heights Residential Properties at Profit

Castellan Real Estate Partners is a New York firm that pursues opportunistic transactions spanning equity investment, development, and property asset management. Among Castellan Real Estate Partners’ noteworthy deals was the July 2016 sale of a trio of residential buildings in Washington Heights for $15.4 million. 

The multifamily properties are situated within a 10-block radius and were described as a perfect buying opportunity within a local investment landscape that combines high demand and an expanding number of competitive financing options. 

Constructed in the 1920s, the three buildings include a 20-unit property at 649 West 184th Street, 25-unit building at 325 Wadsworth Avenue, and 24-unit building at 85 Fairview Avenue. These properties were purchased separately by Castellan between October 2012 and February 2013 for a combined price of $7.6 million, or less than half of what was achieved in the 2016 transaction. The deal, involving the same buying and selling parties, marked the second such transaction in Upper Manhattan within a six-month period.

Weatherization - An Environmental Measure that Benefits Everyone

Castellan Real Estate Partners, headquartered in New York City, serves as a leader in real estate investment. The company purchases, develops, and manages a number of multi-family properties in affordable, sought-after neighborhoods. Over the past decade, Castellan Real Estate Partners has acquired undervalued properties and, after managing them effectively for several years, sold them at double or triple its initial investment.

The company is also serious about reducing its corporate carbon footprint. It has initiated a drive to make all the properties it owns as energy-efficient as possible. Not only is this the right choice for the city’s environment and the company’s tenants, it makes a considerable contribution to the reduction of expenses.

Among the improvements the firm’s leadership has undertaken is the utilization of close to $2 million in grants from the state Weatherization Assistance Program (WAP). Funding from the WAP is available not only to individual homeowners, but to rental property owners as well, based on tenant income eligibility.

New York’s WAP can offer services such as attic insulation, installation of energy-efficient appliances, sealing cracks, renovation of heating systems, repair of mold-causing ventilation bottlenecks, and more. Weatherization services are of particular benefit in New York, which is home to numerous older buildings constructed when energy costs were low. Bringing these buildings up to current standards for energy efficiency increases their value and demonstrates a commitment to tenant comfort and safety.

Castellan Collaborates with Agencies for Greener Buildings

Based in New York City, Castellan Real Estate Partners has acquired investments valued at approximately $750 million in debt and equity. The company has demonstrated success in purchasing multi-family residential buildings, installing considerable upgrades, and maintaining its properties by working closely with tenants. Castellan Real Estate Partners is also invested in the future and remains committed to planning green renovations throughout the properties in its portfolio. The firm has developed relationships with programs and agencies that have made environmental needs and energy efficiency part of New York’s new way of doing business. 

The Northern Manhattan Improvement Corporation, serving Inwood and Washington Heights, is one of several organizations whose weatherization services the firm has used to improve its investments. It has also worked with Brooklyn’s Community Environmental Center, which fights climate change locally, and the Harlem Community Development Corporation, which focuses on reinvigorating that historic neighborhood’s economy. In fact, the Harlem organization specifically chose to work with Castellan to install new solar energy panels on its building on West 141st Street, the first-ever HCDC partnership with a property owner.

The Impact of Single- versus Double-Pane Windows

In 2009, Castellan Real Estate Partners implemented its investing strategy to take advantage of market drops following the 2008 economic crisis. Since then, the firm has switched its strategy to focus on densely populated urban areas. In addition, Castellan Real Estate Partners focuses on tenant satisfaction and green improvement of its properties. 

Making green improvements can significantly enhance the tenant experience and reduce turnover. One such improvement involves replacing single-pane windows with double-pane options.

A single-pane window has only one piece of glass, which makes it less effective at keeping out noise and protecting against outside temperatures. While these windows cost less initially, they result in higher energy bills because they provide very little insulation. Homes in quiet areas with mild seasonal temperatures may not see a difference, but buildings in most areas of the United States benefit significantly from double-pane windows.

The second piece of glass in double-pane windows provides much better insulation. The air that fills the space between the two panes helps trap heat during the summer and cold during the winter, so that air-conditioning and heating systems do not have to work as hard. Double-pane windows can reduce energy bills by 24 percent in the winter and 18 percent in the summer while also keeping out outside noise, which is especially valuable in a city.

Castellan Real Estate Partners’ Property Management

A New York City-based property investment, development, and management firm, Castellan Real Estate Partners has participated in approximately $750 million worth of property transactions since its formation in 2009. Overseen by John and Paul Salib, Castellan Real Estate Partners purchases undervalued and underserved properties throughout New York City and other major metropolitan areas, which it then renovates to create quality and affordable living spaces for tenants. In doing so, it ensures that its buildings reach maximum viability as investments while providing tenants with everything they need to enjoy safe and cost-effective living conditions.

Responsiveness to tenant communications and requirements is a cornerstone of the firm's philosophy, which allows it to stay abreast of maintenance issues while ensuring its buildings continue to meet current building codes. Further, the firm commits to making improvements across its entire portfolio, ranging from the installation of dual-pane windows and energy efficient natural gas boilers, through to the installation of security equipment, such as enhanced intercom systems and video cameras.

A Vertically Integrated Real Estate Investment Firm

A vertically integrated real estate investment firm, Castellan Real Estate Partners has dedicated lines for property management, investment, development, and lending. Founded in 2009, the firm has since completed $750 million in debt and equity transactions. The Castellan Real Estate Partners team consists of dedicated and experienced individuals who have a deep understanding of local markets and significant transaction experience.

One of the most distinctive elements of Castellan’s approach to investment is its focus on green initiatives as a means of adding value to its portfolio. For example, the firm hired a third-party company to audit the energy usage of properties in its portfolio and used the results to make a number of green improvements. The firm has secured more than $1.7 million from New York organizations to invest in the sustainability of its portfolio through projects like the installation of rooftop solar panels and the upgrade of traditional boiler systems with efficient natural gas alternatives.

The firm also focuses on tenant relations as a means of minimizing turnover rates and vacancies in its properties. In addition to responding quickly to tenant issues, the firm invests in features like energy-efficient windows and appliances that save individuals money and improvements like brick pointing and modern security systems to better the tenant experience.

Castellan Real Estate Partners' Experienced Team

Castellan Real Estate Partners combines extensive market knowledge with a keen ability to execute its services to establish an integrated real estate investment platform that deals in retail and residential property. The company’s activities cover a variety of sectors, from equity investments and bridge lending to development and construction. It also handles property management. Based in New York, Castellan’s portfolio consists of properties throughout the city and other major metropolitan areas.

A team of dedicated real estate and investment professionals enable Castellan to maintain a disciplined investing approach across capital structures. Members of the team consist of investment professionals and skilled property and construction managers. Furthermore, the company stations support team members at its managed properties in order to provide responsive service to residents. Affiliated principals also possess significant experience in the structure, sourcing, and execution of real estate transactions.

Beyond its everyday operations, Castellan Real Estate also supports the Robin Hood Foundation, which has participated in over 200 programs throughout New York City that fight poverty.

About Castellan Real Estate Partners

A respected property investment and management firm, Castellan Real Estate Partners has operated out of New York City since 2009. Over the years, it has invested in debt and equity transactions with a combined market value of roughly $750 million. The firm performs assessments on all buildings that it acquires to ensure that they are energy efficient and environmentally proactive.

The firm has found that the single most effective way to reduce fuel consumption is to convert building boilers from oil to natural gas. In addition to its reduced cost, natural gas burns cleaner and, therefore, presents less of a threat to the environment. Natural gas currently heats 64 percent of Castellan properties.

By contracting with the third-party engineering firm Bright Power, Castellan performs extensive energy audits on each of its properties. The recommendations of these audits have led to repairs and improvements that range from the optimization of HVAC distribution ducts to the installation of low-flow toilets.

Going Green

Castellan Real Estate Partners are firm believers in going green. As such, Castellan has exerted considerable effort in improving energy efficiency across its portfolios. Its goal has been to identify ways to save energy, minimize its carbon footprint, and reduce operating costs.

As long- time, responsible owners of real estate in the City, we have developed good relationships with various city agencies such as the Department of Housing, Preservation and Development (HPD), the Department of Buildings (DOB), and the Department of Environmental Conservation (DEC), among others. These relationships have helped Castellan in a number of ways, from helping obtain weatherization grants to deal flow.

Castellan Real Estate Partners’ ongoing relationships with the Northern Manhattan Improvement Corporation, Harlem Community Development Corporation (“HCDC”), and Community Environmental Center (Brooklyn) have also resulted in weatherization grants used to improve buildings’ energy efficiency and make enhancements to the firm’s properties such as converting old oil-burning boilers to new duel fuel boilers that have the capacity to burn oil or natural gas. Castellan has been awarded over $1.7 million in grants from the New York State Weatherization Assistance Program (WAP).

Due to Castellan Real Estate Partners’ strong commitment and support of these weatherization initiatives, Castellan was selected by the HCDC to install solar panels on the roof of 148 West 141st St. This gave Castellan the distinction as being the first owner to take part in a solar panel project sponsored by the HCDC. As an active participant and supporter of this program, Managing Partner Paul Salib was called upon by these agencies to lobby on their behalf to members of state and federal legislative bodies for increased funding.

Managing Partner John Salib noted, “Castellan Real Estate Partners was pleased to play a part in reducing the contribution of our properties on climate change. This was a win for our tenants as they receive the benefit of building improvements without having to bear the major capital improvement rent increases that would typically be associated with these improvements; Castellan got the benefit of having these improvements subsidized by HCDC funds; HCDC assigned the work to local contractors, which helped create work in the local economy; and importantly, the work resulted in lower greenhouse gas emissions from our buildings, which helps the environment.”