Mandy’s 2020 Buying Spree Tops $37M

2020 proved a banner year for Mandy Management, as its affiliates spent over $37.2 million buying roughly 390 apartments citywide, more than double the amount it spent in its 2019 spree.

A housing and job-creation success story? Worrisome concentration of low-income housing? Or business as usual in New Haven?

Those differing takes emerged in discussions about Mandy’s meteoric three-year rise in the city’s affordable housing market.

According to the Independent’s yearlong review of new property transactions recorded on the city’s online land records database, limited liability companies (or LLCs) associated with the Netz/Mandy Management organization spent a total of $37,201,821 on New Haven real estate in 2020.

That spending spree bought Mandy 108 different properties containing around 390 apartments and condos, as well as a handful of commercial units across the city.

The network’s 2020 acquisitions capped a three-year surge during which Mandy Management affiliates spent a total of over $66 million adding roughly 750 New Haven apartments to their already sizable holdings.

See here and here for previous end-of-year recaps of Mandy’s local real estate activities.

To Mandy Management property manager Yudi Gurevitch, his company’s expansion in 2020 represents the story of a successful local business that employs New Haveners, provides an essential service for renters, and invests millions every year in a regional economy it has come to know well.

To city Affordable Housing Commission appointee Serena Neal-Sanjurjo and confirmed member Anika Singh Lemar, it represents a worrisome concentration of a sizable portion of the low-income rental market in the hands of a single player.

To housing and zoning attorney Ben Trachten, it represents a simple fact of the market, not worth more or less attention than the activities of other landlords — especially given that Mandy still owns just a fraction of the local rental landscape.

To some tenants at newly acquired Mandy properties in the Annex, it represents a positive shift towards a more responsive maintenance team, if they’ve noticed a difference at all.

And to former Mandy Management staffer Jacob Miller — who co-runs a local real estate brokerage and software development firm and who tracked Mandy’s exponential local growth during the Great Recession — it represents the triumph of a ​“disaster capitalist” business model that directs rent and outside investment into new acquisitions rather than into maintenance and capital repairs.

Mandy: Nothing Sinister. ​“This Is Our Business”

One of the company’s last purchases of 2020 was a rare non-residential buy — and an indicator of Mandy’s recent explosion in size, as well as of its increased investment in property upkeep.

That acquisition was of a single-story warehouse at 221 Wallace St., across the street from another warehouse that the company bought the year prior to store boilers, washing machines, refrigerators, and other household appliances needed to serve its ever-growing number of tenants.

“This is our business; we buy, renovate and rent property,” Gurevitch wrote in response to the Independent’s email request for comment for this story.

There is nothing sinister going on here, he wrote. This is simply evidence of a successful business that has grown its Greater New Haven regional property holdings to around 2,500 apartments over the past two decades.

“Many sellers come to us directly when they want to sell,” he continued when asked to explain how Mandy manages to grow so quickly year after year. ​“This includes single property owners and investors with small portfolios. Realtors also bring us properties and packages of properties because we generally act quickly to close without extensive inspection periods and financing contingencies.

“Our knowledge of the local market conditions and rental rates allow us to move quickly and pay top dollar as compared to our competition. Sellers appreciate this. Many sellers are ordinary residents who have come to struggle at being landlords. Either they can’t keep their properties in good condition or they have gotten tired of the regulatory environment that places the tenant’s rights far above the landlord’s. This is a complaint I hear every day. We also have the ability to wait patiently for complex title issues to be resolved or for sellers to obtain short sale approvals for those kinds of deals.”

Mandy Management was founded roughly two decades ago by the Brooklyn-based landlord Menachem Gurevitch, and is currently run out of the Beaver Hills neighborhood. It manages properties for the Netz Group, a real estate private equity firm owned in part by Gurevitch that is chartered in Connecticut, based in New York, and publicly traded on the Tel Aviv Stock Exchange.

Mandy Management’s website states that the rental management company operates over 3,000 units across four states, and that the company first started managing rental properties in 1998.

According to a 2020 housing data profile of New Haven put together by the Partnership for Strong Communities, 64 percent of New Haven residents are renters and 76 percent of the city’s 56,102 total housing units are in multi-family dwellings.

What Mandy Bought In 2020

Just as in 2018 and 2019 — the previous two years that the Independent has tracked every real estate sale in the city — Mandy’s companies bought up a diverse array of housing stock concentrated in predominantly lower-income, African American and Hispanic neighborhoods located far from the city center.

Their $37.1 million, 394-unit real estate splurge in 2020 had a particular concentration on the city’s far east side in the Annex ($12.1 million spent / 134 housing units bought), Fair Haven Heights ($2.9 million / 30 units), and Quinnipiac Meadows ($3 million / 33 units), with additional focal points in the Hill ($2.1 million / 32 units), Beaver Hills ($2.3 million / 22 units), Fair Haven ($1.7 million / 23 units), and Newhallville ($1.5 million / 19 units).

Some of Mandy’s real estate acquisitions from this past year include:

• A 42-unit condo complex at 320 Quinnipiac Ave., bought on Nov. 16 for over $4 million.

• A 26-unit apartment complex at 45 Barnes Ave., bought on June 25 for over $2.4 million.

• An eight-unit, retail-apartment building at 28 East Grand Ave. and a two-unit, retail-apartment building at 686 Quinnipiac Ave., bought on June 23 for the combined sum of $975,000.

• A four-family house at 64 Ashland Pl., bought on Aug. 28 for $350,000.

• A three-family house at 114 Shelton Ave., bought on Jan. 30 for $210,000

• A two-family house at 205 Atwater St., bought on Aug. 24 for $200,000.

• A single-family house at 282 Davenport Ave., bought on Oct. 28 for $125,000.

Mandy’s average purchase price for its residential acquisitions in 2020 was just over $247,563. That was around $70,000 more than the average city appraisal price of those same properties, which was closer to $173,007.

Gurevitch told the Independent that Mandy Management does not simply put money into buying properties. It also puts millions every year into fixing them.

He said that Mandy Management invested $4 million in 2020 into improving new residential acquisitions alone.

“This is besides all the improvements we have done on all our other/older properties,” he wrote. ​“I think if you looked into It you will find that we put a lot of money in fixing up our properties compared to other landlords.”

He also noted that Mandy Management is not a monopoly in the New Haven low-income rental market. ​“We are not the only buyer in town and there are many competitors who are accumulating large portfolios of similar properties.”

Indeed, Mandy Management/Netz was by no means the only large local real estate actor to drop millions of dollars buying New Haven properties last year.

It did far outpace any other investors in total dollars spent, in total housing units acquired, and in the diversity of neighborhoods they bought in and the variety of residential building types they acquired.

Some of the other busiest buyers of New Haven real estate last year included:

• Mendel Paris, who — sometimes alone, sometimes with business partners — spent over $10.4 million buying over 60 units of local housing and office space.

• Beacon Communities, which spent $8.9 million buying 15 residential and commercial units, including a Ninth Square surface parking lot where it plans to build a new 60-unit apartment complex.

• Ocean Management, which spent over $3.1 million buying 34 apartments citywide — and which also won permission to construct 129 new market-rate apartments at the site of the former 500 Blake Street Cafe in Westville.

The largest single real estate transaction of the year was Winstanley Enterprises’ $21 million buy of the Temple Medical Center office and lab tower downtown.

Former Employee: Growth, Growth, More Growth

To Jacob Miller, Mandy’s sweep across the city last year marked a continuation of a pattern of rapid expansion he saw firsthand in the wake of last decade’s subprime mortgage and foreclosure crisis.

A Westville native and the co-owner of a local real estate brokerage and software development company, Miller took a year off from college in 2012 to work as a security guard at the Mandy-owned medical building at 419 Whalley Ave.

That property is immediately adjacent to Mandy Management’s local headquarters and main leasing office at 399 Whalley Ave. Miller said the job offered him a front-row view of the company as it grew by leaps and bounds.

He wrote about what he saw and learned — through direct observation and conversations with fellow Mandy employees, maintenance workers, and top managers at the time — in his 2014 Trinity College undergraduate senior thesis, entitled ​“Subprime Disaster Capitalism in New Haven.”

The paper dedicates over a dozen pages to his experience working for Mandy Management and his analysis of its business model, which could perhaps best be summarized by three words:

Expand. Expand. Expand.

“In the wake of the national subprime mortgage crisis and the resulting devastation of housing markets, local property management companies [like Mandy Management] recognized an opportunity for increased revenue through the monopolization of rental housing in specific underserved neighborhoods,” Miller wrote in the thesis. 

“This market dominance allowed for the dictation of future expectations and conditions for low-income and [federal] section‑8 [rental subsidy program] residents. Rather than acting as a catalyst for growth, they strategically acquired properties for fractions of the original value, foregoing capital improvement while using section‑8 rental dollars for further acquisitions. This market domination led to rapid neighborhood deterioration and exacerbated poverty by limiting service access.”

In an interview with the Independent, Miller stood by his thesis’s conclusions six years after he wrote it — and a half-decade into his own career in real estate, having worked for a Meriden-based mortgage servicing company as well as his own real estate brokerage and software firm.

Gurevitch dismissed Miller’s undergraduate analysis and more contemporary comments. ​“He seems to have gotten the job for the sole purpose of doing his research. So I consider his conclusions and thoughts of no value,” Gurevitch wrote to the Independent. ​“This was an undergraduate senior project. It remains available only because the internet keeps content forever. I can’t imagine that he was included in any high level meetings within the company and anything he may have picked up was purely the unsubstantiated inferences of a college student trying to understand a business from a job that he took under false pretenses. I don’t give his conclusions any weight.”

During Miller’s recent interview with the Independent, he said that Mandy’s Great Recession-era growth came primarily through directing rental and outside investor dollars into buying distressed local housing stock that was suddenly available at below-market prices.

“Mandy didn’t originate this concept,” he said.

Miller also described what he saw as a core similarity between Mandy’s growth during the Great Recession and its current expansion during the Covid-induced crisis year of 2020.

He said the pandemic has resulted in dramatically different housing market conditions from those caused by the burst housing bubble of 2008. That’s in large part because well-off New Yorkers and white-collar workers able to do their jobs from home are fleeing to Connecticut to buy more space for less money than they’d have to spend in New York City.

“This has been one of the hottest housing markets we have seen in Connecticut in a very long time,” Miller said. ​“Prices are high. Inventories are low. Demand is at all-time highs,” all of which would seem to make it ​“not the best time for someone to come in and buy a lot of rental housing.”

But that is not the sector of housing that Mandy Management works in, Miller noted.

The current Covid crunch has resulted in a competitive housing market elsewhere in the suburbs and wealthier areas of cities. Meanwhile, Miller observed, it has produced conditions ripe for landlord consolidation in the low-income rental market that Mandy primarily operates in.

That’s because they have the size, scale, cash reserves and industry-wherewithal necessary to weather a temporary loss of rental income from some tenants who may get sick and lose their jobs. They can keep adding to their holdings all the while.

He said companies like Mandy Management are adept at purchasing so many properties so quickly because they can afford to buy properties with a ​“cash offer” — meaning that they can give a seller the entire purchase price upfront, without any contingencies or waiting on a third-party lender.

Considering the city’s low vacancy rates and need for more affordable housing, there will always be low-income tenants looking for housing provided by groups like Mandy.

“Their captive audience just grows larger as people suffer more economically,” Miller said.

“What’s the logical thing to do?” Miller continued. ​“You’re a business that has found this super-profitable niche in the rental market. You’re gonna buy more.”

“Via this strategy, Mandy Management was able to secure significant portions of the available low-income rental properties that fell into foreclosure or went up for sale in the wake of the housing crisis between 2008 – 2011,” Miller wrote in his 2014 thesis. ​“The company quickly became one of a few monopoly stakeholders in this subset of the local housing market. Unfortunately for renters looking for affordable housing, poor conditions and service were commonplace in Mandy Management properties. Towards the end of my time working with the company, business exploded.”

Annex Tenants: So Far, So Good

Tenants of apartments newly purchased by Mandy Management in the Annex told the Independent that they have had no problems with their relatively new landlords.

Some said that the new property management company represents an improvement over the services they received under the prior landlord.

“They’re better,” said 110 – 120 Fairmont Ave. resident Stephanie Costello (pictured above). ​“They clean up here frequently.”

She said she has lived in the six-unit, two-story apartment complex for roughly a year, having moved in soon before Mandy Management purchased the property in January 2020 for $530,769. Costello said that her mother has lived in the apartment for 25 years.

“They treat us pretty good,” she said about Mandy Management. She said her heat has gone out a few times over the course of the past year. And each time that happens, a maintenance crew comes out and fixes the problem.

“It’s Covid,” she said. ​“Before Covid, they were a lot quicker, but they’re still good.”

Walter Jack said he and his family have lived in an adjacent apartment at the Fairmont Avenue complex for 30 years.

“They’re great people,” he said about Mandy Management. Whenever he needs someone to come out to fix a sputtering appliance, like a stove or a refrigerator, someone comes promptly. ​“They’ve fixed them all,” he said.

A tenant at a single-family house at 164 Peat Meadow Road, which Mandy Management purchased in February for $120,000, said the same.

“They’re good,” said the tenant, who declined to be named or photographed. ​“They come out when I need them.”

At the 42-unit condo complex at 310 Quinnipiac Ave., which a Mandy Management affiliate purchased on Nov. 16 for just over $4 million, two tenants rushing to catch a bus told the Independent in mid-December that it was too soon to tell how their new landlord would compare to their former one.

What did they make of their previous landlord, Amit Lakhotia? ​“They was decent,” one renter said.

Trachten: This Is Not What A Monopoly Looks Like

Ben Trachten (pictured), a local attorney, represents both landlords and tenants and formerly chaired the city’s Board of Zoning Appeals. Mandy Management’s growth and current business in New Haven strike him as — well, as not worth too much spilled ink (or whatever the digital equivalent is).

He said that New Haven’s residential rental market has long had bigger and smaller players. He estimated that Mandy Management probably controls around 5 percent of local rental housing, maybe closer to 10 percent in certain low-income neighborhoods. ​“That is far from a monopoly,” he said. There are plenty of other major and minor real estate players in town.

“Landlording is a business,” Trachten wrote in an email response to the Independent, ​“and property ownership, in and of itself, is not a net negative or positive to society. It just is. Trying to over- regulate because of a fear of monopoly (unwarranted fear in my opinion) must lead to pushback by these landlords because it leads to death by 1,000 small cuts.”

Trachten recalled ​“true slumlords” of years past, like Apple Management and Ottowa Enterprises/New England Housing Company, that existed in New Haven before the financial collapse of 2008.

“I represented some of them, and they were heartless and not local,” he wrote. ​“Courts couldn’t find them to drag them in for their criminal violations.”

That is not the case with Mandy Management, he said.

“Mandy Management is right there at 399 Whalley,” he wrote. ​“You can get Yudi on the phone in 5 minutes. They aren’t hiding. They put their name on their buildings. Their staff live in the New Haven community. Their workers earn good wages. And the Mandy Management success has probably put half a billion dollars into local pockets over the years in renovation work, purchases, materials, services, etc.”

He said that you don’t see Mandy Management dragged into criminal court regularly ​“because they’ve learned that you just can’t allow the big stuff to fall through the cracks (heat, appliances, lead paint, etc) and it doesn’t. I think there are many tenants who are satisfied with the housing they get from Mandy Management.”

He called Mandy Management’s surge in local buying more of an indication of a hot housing market than any semblance of monopolistic activity.

“Prices are going up for everything and expectation of returns are going down,” he wrote. ​“In 2009- 2012 it was common to get a multifamily for 30 – 50k per unit in less desirable areas. That number has dramatically increased; doubled or more in 8 – 10 years. I think this shows the confidence that investors have in New Haven’s rental market at all levels. From poverty housing to the top of the market, investors are paying top dollar to participate.”

Potential Rx: Affordable Homeownership, Right To Counsel, More Construction

Monopoly or not, weighed in Serena Neal-Sanjurjo and Anika Singh Lemar during interviews with the Independent, Mandy Management just keeps growing and growing and growing. That concentration, especially in certain sectors of the rental market, could spell trouble for vulnerable tenants, they warned.

Neal-Sanjurjo, the former head of the city’s neighborhood anti-blight agency and a recently tapped member of the city’s new Affordable Housing Commission, agreed with concerns expressed by Miller in his analysis of Mandy Management’s growth.

“What they’re doing has been their plan from day one,” she said. ​“They want a monopoly on rental units throughout the city. And they’ve had very little competition in terms of having others be able to compete with those kinds of numbers.”

For a city as small as New Haven, she said, $37 million worth of acquisitions in one year is quite significant.

The consequences of such rapid expansion by a company like Mandy Management is that ​“we have entire neighborhoods that are largely rental,” Neal-Sanjurjo continued.

“Yes, we have the ability to do inspections. Yes, we have a residential licensing program that they are clearly participating in. But as a city, we have to look at the housing impact in our neighborhoods” by such a large share of the market being controlled by one particular player.

“If we don’t look at doing things a little bit differently in terms of working with our banks, working with homeowners that are underwater, and looking at foreclosure options, we are not ever going to be able to change it,” Neal-Sanjurjo said.

She pointed to the affordable homeownership work promoted by the city’s Livable City Initiative (LCI) and the quasi-public Economic Development Corporation, for which she consults, as offering one route out of a low-income rental market increasingly controlled by a single player. She called for putting more money and resources behind inclusive, equitable, and affordable homeownership in the city to counteract the apparent monopolistic expansion of one company in the local rental market.

Lemar, a fellow Affordable Housing Commission member and Yale Law School professor said that she too is concerned by Mandy Management’s local acquisitions.

“While units owned by Mandy might appear to be a small percentage of New Haven’s total number of housing units, because the housing market is segmented, we still have to worry that they own or will soon own enough units to dominate a particular market segment,” she argued.

She said tenants are already ​“disempowered actors in housing markets.”

Because there is insufficient housing supply, tenants lack options when they want or need to move. Tenants are disproportionately low and moderate-income, and often unable to afford adequate legal representation if forced to go to housing court. And state and local government don’t invest nearly enough in adequately regulating housing quality.

In one of three housing-related op-eds published in the Independent in 2020, students from Yale Law School’s Housing and Community and Economic Development Clinics — which Lemar helps run — called on the city to guarantee a right to counsel in eviction proceedings. They called for a ban on tenant blacklisting in order to protect renters during the Covid crisis.

“A large local landlord that dominates a particular market segment could only make the existing situation worse, unless there’s significant regulatory infrastructure to ensure minimum standards when it comes to housing quality,” Lemar wrote to the Independent when asked about Mandy Management.

“Adding new supply, whether or not subsidized, would also help by providing tenants additional options if their current housing is inadequate (either directly or indirectly as a result of moves made to newly-built housing).”