ANALYST MEET February 25, 2008 ANALYST MEET February 25, 2008.
February 2012 Meet the Landlord
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Vital Stats: Name: Adam Mermelstein Title: Managing Member, Treetop Development Age: 32 Hometown: New Rochelle, N.Y. Currently living in: Teaneck, N.J. 52 February 2012 www.TheRealDeal.com BY JANE C. TIMM PHOTOGRAPH FOR THE REAL DEAL BY JAMES CHANG Building Blocks How many buildings do you own? Fifteen buildings, with 2,325 units. We have large complexes here in New Jer- sey, like 624-777 Martin Luther King Boulevard in Newark with 256 units. But right now we’re making a strong push to move back into Manhattan. This month, we’re set to close on 392 rent-stabilized residential units and 45 com- mercial units between West 105th and West 110th streets. What are your plans for these new purchases? As the units turn [over], we’ll be doing significant interior renovations — pretty much a gut renovation of each apartment — that we hope will bring the apartments to market value. We’re not going to be harassing the rent-stabilized tenants or pushing them out, but as they leave, we’ll be upgrading. ... We’re defi- nitely looking to spice up the hallways, make them a lot more hip and modern. How did you get into real estate? After graduating [from] college, I started working for two el- derly fellows who were slowing down a bit. They flipped build- ings in New Jersey. Through working with them, I started to understand real estate, and it also let me make pretty good money. After about a year and a half, I bought my first build- ing on East 6th Street in Manhattan with the money I’d earned. When did you start your own company? My partner, Azi Mandel, and I have been in business with TreeTop since 2005. ... When we started out, we were initially building and developing condos in New Jersey and New York City. We made a lot of money when Landlord life What’s the most challenging part of being a landlord? Maintaining the balance between making money and keeping our investors hap- py, as well as pleasing the tenants. The landlord-tenant relationship is a difficult one. Sometimes tenants’ needs can be unreasonable, but it is their home, and we try to have an understanding while still being mindful that we’re in this to make money. I once got a call at 4 o’clock in the morning. This woman was screaming that her alarm was on fire and she’s going to die. I sent the super there and her alarm clock was sparking — all she had to do was unplug it. What’s the best thing? I love talking to people, and I love being out in the field. I was walking through a building with an investor [recently], and a tenant walked into the elevator. I started to get nervous — most of the time, [when] a tenant sees a landlord, the tenant is going to complain. But the tenant gave the most glowing review of the management and the renovations we’d recently done. It made me feel really good. The Post named you New York’s Worst Landlord in 2007. What was that like? That’s my tenant horror story! We purchased 188 South 3rd Street in 2006. It was a 41-unit building in Williamsburg, and the 21 occupied units were on a rent strike, which is one of the reasons we purchased it so cheap. We started renovations and [the tenants] started making false accusations [that they were being pushed out], and defaming my name. There was a “voice vote” for worst landlord — which is where whichever group yells the loudest wins — and my tenants yelled the loudest. The New York Post called me to tell me when I was at lunch with my wife. It ruined my lunch! But at the end of the day, it went to court and the judge made [the tenants] pay back all their back rent. They wouldn’t have had to do that if their accusations were right. We sold the building after 18 months, and doubled our money. The bottom line Why are you focusing on Upper Manhattan? We see [the area] between 100th Street and 125th Street — especially on the West side — as a pocket that’s prime for future growth because of its proximity to Columbia. Is buying new buildings difficult in today’s climate? It’s a numbers game. If you bid on five or 10 [deals], hopefully one or two of them pan out. There’s a lot of competition for the good deals. How is the market doing, from your perspective? I think the market has certainly recovered from a year and a half ago on the commercial side — it’s close to the highs of 2006, 2007. As far as housing, I don’t think we’re even close to a recovery. things were go- ing well, and we lost a lot of money when things weren’t go- ing well. It’s just too risky sell- ing condos right now. That’s why we decided to get back into multifamily housing and be- ing landlords. Mermelstein’s New Jersey properties — Mermelstein’s Manhattan properties — 110 West 116th Street
Transcript of February 2012 Meet the Landlord
Vital Stats:
Name: Adam MermelsteinTitle: Managing Member, Treetop Development
Age: 32Hometown: New Rochelle, N.Y.Currently living in: Teaneck, N.J.
52 February 2012 www.TheRealDeal.com
By Jane C. Timm
PHOTOGRAPH FOR THE REAL DEAL BY JAMES CHANG
Building BlocksHow many buildings do you own? Fifteen buildings, with 2,325 units. We have large complexes here in New Jer-sey, like 624-777 Martin Luther King Boulevard in Newark with 256 units. But right now we’re making a strong push to move back into Manhattan. This month, we’re set to close on 392 rent-stabilized residential units and 45 com-mercial units between West 105th and West 110th streets.
What are your plans for these new purchases?As the units turn [over], we’ll be doing significant interior renovations —
pretty much a gut renovation of each apartment — that we hope will bring the apartments to market value. We’re not going to
be harassing the rent-stabilized tenants or pushing them out, but as they leave, we’ll be upgrading. ... We’re defi-
nitely looking to spice up the hallways, make them a lot more hip and modern.
How did you get into real estate?After graduating [from] college, I started working for two el-derly fellows who were slowing down a bit. They flipped build-ings in New Jersey. Through working with them, I started to understand real estate, and it also let me make pretty good money. After about a year and a half, I bought my first build-
ing on East 6th Street in Manhattan with the money I’d earned.
When did you start your own company?My partner, Azi Mandel, and I have been in business with TreeTop since 2005. ... When we started out, we were initially building and developing condos in New Jersey and
New York City. We made a lot of money when
Landlord lifeWhat’s the most challenging part of being a landlord?Maintaining the balance between making money and keeping our investors hap-py, as well as pleasing the tenants. The landlord-tenant relationship is a difficult one. Sometimes tenants’ needs can be unreasonable, but it is their home, and we try to have an understanding while still being mindful that we’re in this to make money. I once got a call at 4 o’clock in the morning. This woman was screaming that her alarm was on fire and she’s going to die. I sent the super there and her alarm clock was sparking — all she had to do was unplug it.
What’s the best thing?I love talking to people, and I love being out in the field. I was walking through a building with an investor [recently], and a tenant walked into the elevator. I started to get nervous — most of the time, [when] a tenant sees a landlord, the tenant is going to complain. But the tenant gave the most glowing review of the management and the renovations we’d recently done. It made me feel really good.
The Post named you New York’s Worst Landlord in 2007. What was that like?That’s my tenant horror story! We purchased 188 South 3rd Street in 2006. It was a 41-unit building in Williamsburg, and the 21 occupied units were on a rent strike, which is one of the reasons we purchased it so cheap. We started renovations and [the tenants] started making false accusations [that they were being pushed out], and defaming my name. There was a “voice vote” for worst landlord — which is where whichever group yells the loudest wins — and my tenants yelled the loudest. The New York Post called me to tell me when I was at lunch with my wife. It ruined my lunch! But at the end of the day, it went to court and the judge made [the tenants] pay back all their back rent. They wouldn’t have had to do that if their accusations were right. We sold the building after 18 months, and doubled our money.
The bottom lineWhy are you focusing on Upper Manhattan? We see [the area] between 100th Street and 125th Street — especially on the West side — as a pocket that’s prime for future growth because of its proximity to Columbia.
Is buying new buildings difficult in today’s climate? It’s a numbers game. If you bid on five or 10 [deals], hopefully one or two of them pan out. There’s a lot of competition for the good deals.
How is the market doing, from your perspective? I think the market has certainly recovered from a year and a half ago on the commercial side — it’s close to the highs of 2006, 2007. As far as housing, I don’t think we’re even close to a recovery.
things were go-ing well, and we
lost a lot of money when things weren’t go-
ing well. It’s just too risky sell-ing condos right now. That’s why we decided to get back into multifamily housing and be-ing landlords.
Mermelstein’s New Jersey properties
—
Mermelstein’s Manhattan properties
—
110 West 116th Street
