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06.01.13 | Real Deal New York

New York’s upstart investors find big profit

As New York City sales began recovering from the paralyzing real estate downturn, scores of investors worldwide launched companies and funds to buy up what they expected would be a windfall of distressed assets here, with billions of dollars of global wealth competing to back them.

But these newcomers faced competition for properties from aggressive, established buyers such as SL Green Realty, Extell Development, Thor Equities and the Chetrit Group.

Still, a few new companies have succeeded in landing significant deals and cobbling together portfolios since the recession. This month, The Real Deal used data from the research firm Real Capital Analytics to identify 10 new players that have spent at least $80 million buying two or more New York properties since 2010.

Some of these new companies have founders with decades of experience in New York City real estate. Jeffrey Kaplan, who launched Meadow Partners, was at the private equity giant Westbrook Partners. And Douglas Eisenberg left Urban American, one of the largest owners of rent-regulated apartment buildings in the New York area, to start A&E Real Estate in 2011.

Others are upstarts hungry to make their mark on the industry. Sam Schneider, 35 and Daniel Glaser, 29, for example, are former Eastern Consolidated brokers who launched Imperium Capital in 2010.

Many of these new firms said their biggest challenge is not finding investors, but sourcing deals in a crowded market.

“There are millions of companies starting,” Schneider said. “The money is not the issue – it’s getting control of the properties.”

To beat the competition, some of these new players seek out off-market deals and focus on properties less than $50 million. Deals that size are “under the radar of the big players,” said Mody Kidon, chairman of three-year-old Alto Investments.

Now, for a closer look at these up-and-coming investors.

Imperium Capital
Founded: 2010
Principals: Sam Schneider and Daniel Glaser

Since Sam Schneider, 35, and Daniel Glaser, 29, founded Imperium Capital in 2010, they’ve completed a string of mostly off-market Manhattan acquisitions totaling $342.5 million, according to RCA. The new firm has also partnered with some of the largest real estate companies in the city, including Laurence Gluck’s Stellar Management and the Chera family’s Crown Acquisitions.

To do this, Schneider and Glaser have leveraged connections they made while working at now-defunct developer KMG Partners, then later as brokers at Eastern Consolidated.

In fact, Glaser said, working at Eastern Consolidated helped them formulate a broker-like “hunt and peck” strategy for sourcing deals. “We brought the broker mentality to the principal side of the business,” he said.

For example, in May 2012 Imperium partnered with Gluck to buy two Soho office buildings – 16-story 161 Sixth Avenue and 10-story 233 Spring Street – for about $200 million.

Glaser and Schneider had known the owner for years, Glaser said.

“We kept in touch, and for [the seller’s] own reasons, he decided it was time to sell,” Glaser said. At that point, Imperium brought the deal to Gluck, who they’d talked to about other deals, none of which panned out. This time, Gluck jumped at the chance.

Imperium has also done high-profile retail deals, such as the December 2011 purchase of the Soho Apple store building at 103 Prince Street for $70.85 million. Imperium partnered with Crown and Centurion Realty on the deal.

Imperium, headquartered at 512 Seventh Avenue, now has seven employees.

http://therealdeal.com/issues_articles/new-yorks-upstart-investors-find-big-profit/