Mandy’s 2018 Buying Spree Nears $13M

A single-family Colonial in Fair Haven. A two-story condo in the Annex. A three-family house in Newhallville. A 21-unit complex in Edgewood.

Those are four of 87 New Haven properties that the Netz/Mandy Management organization took over in 2018, a year that saw the operation acquire over 170 units and spend almost $13 million in expanding its local real estate empire of low-income rental apartments.

Over the past 12 months, partnerships affiliated with Mandy Management spent $12,863,511 buying at least 87 separate buildings in the Elm City, according to city land records. Mandy’s 2018 acquisitions add 173 to its mammoth New Haven portfolio.

Click here to download a list of all 87 of the Mandy-related 2018 New Haven property purchases. (The figures cover transactions recorded through Dec. 19.)

Mandy, which was founded two decades ago by Brooklyn-based landlord Menachem Gurevitch, manages properties for Netz Group, a real estate private equity firm owned in part by Gurevitch. Netz is chartered in Connecticut, based in New York, and publicly traded on the Tel Aviv Stock Exchange, bringing millions of dollars in investments from Israel and the United States into the New Haven low-income housing market each year.

Netz owns over $150 million in residential and commercial real estate in Florida, Georgia, New York, and elsewhere, including 332 properties in New Haven, Chief Investment Officer Frank Micali told a recent community meeting. Netz buys New Haven properties under separately established limited liability companies (LLCs), such as Netz Bonds New Haven VIII, LLC and Gur New Haven II, LLC; Mandy serves as the property manager for those rentals. Mandy’s website says that the company manages over 2,500 apartments across four states.

While Mandy’s 2018 buying spree spanned the city from Amity to the East Shore, from City Point to Cedar Hill, most of its acquisitions came in Edgewood, Fair Haven, Newhallville, Beaver Hills, Fair Haven Heights, and the Hill.

In Edgewood, Mandy spent $2.5 million on 34 apartments at two different apartment buildings: a 21-unit complex at 202 – 208 Sherman and a 13-unit complex at 315 Winthrop Ave.

In Fair Haven, Newhallville, Beaver Hills, the Heights, and the Hill, Mandy’s acquisitions were mostly of one, two, and three-family homes.

In Fair Haven, Mandy spent $1.7 million on 29 apartment units across 17 different buildings.

In Newhallville, Mandy spent $1.7 million on 22 apartment units across 15 different buildings.

In Beaver Hills, Mandy spent $1.3 million on 11 apartment units across five different buildings.

In the Heights, Mandy spent $1.2 million on 11 apartment units across seven different buildings.

And in the Hill, Mandy spent just over $886,000 on 13 apartment units across seven different buildings.

Mandy’s average purchase price across all 87 acquisitions in 2018 was $146,176, which is almost exactly the same as the $147,797 average city appraisal of the purchased properties. The median price across all 87 properties was $109,250, while the median city appraisal for the properties was $122,800.

Mandy’s current buying spree represents a significant increase in dollars spent and units acquired over 2017. Last year, Mandy spent just over $5 million on New Haven real estate, buying 28 buildings and 77 apartment units.

Click on the map below to view all Mandy Management acquisitions in 2018.

Ocean Surges As Pike and NHR Refocus

The city’s construction boom in market-rate apartments and tax abatement negotiations with the new owners of the Residences at Ninth Square kept most of the year’s economic development and affordable housing conversations focused Downtown. Meanwhile, Mandy more quietly secured its place as one of the largest owners of low-income rental properties in the city’s less affluent neighborhoods.

Another major low-income housing landlord, Ocean Management​‘s Shmuel Aizenberg, also added dozens of units in Fair Haven and Newhallville to his own local real estate portfolio. According to city land records, various LLCs owned by Aizenberg spent over $3.3 million buying 20 different properties containing 51 apartment units in New Haven in 2018.

In 2016, Ocean affiliates owned around 500 apartments throughout New Haven, according to local Ocean landlord Mendy Katz. Katz did not respond to a request for comment on an updated number for how many units Ocean affiliates own throughout the city at the end of 2018.

The year that was also saw two other major local landlords, Pike International and NHR Properties, continue to shift their real estate interests from lower-income to more upscale and mid-scale projects, respectively. Neither of the two developers purchased new properties in New Haven in 2018, according to city land records.

Pike founder and owner Shmully Hecht told the Independent that his local real estate empire has downsized from over 1,000 units throughout the seven years ago to around 750 units today. He said Pike has sold off many of its properties in lower-income neighborhoods due to high crime and meager law enforcement, and has focused instead on downtown luxury projects.

Pike is now ​“focused on its luxury portfolio,” Hecht told the Independent, ​“the continued revitalization of historic New Haven, and providing excellent customer service to its Yale-affiliated residents.”

NHR’s Juan Salas-Romer also said this year that his real estate company is zeroing in on a rental market it sees as greatly underserved in New Haven: middle-income renters who make between $40,000 and $75,000 per year.

“Our focus is going to remain on existing buildings where we could convert or upgrade or serve the middle market,” he said, referencing projects like Ashmun Flats that can charge between $1,200 and $1,500 per month in rent.

Salas-Romer also told the Independent earlier this year that NHR is in a development cycle where it is divesting itself of some of its smaller one, two, and three-family homes in lower-income neighborhoods in order to focus instead on more upscale projects like the Palladium Building downtown and the Heights on the River project in Fair Haven Heights, where he hopes to begin construction next year.

Salas-Romer said that NHR currently owns around 250 apartment units throughout the city. He said his company also owns some commercial property and the New Haven Village Suites hotel. He said NHR also serves as a third-party property manager for 900 city apartments owned by other landlords.

After Netz and Ocean’s affiliates, some of the most active buyers in New Haven in 2018 were local landlords Chaim Vail and Yakov Borenstein, whose companies New Haven Community Development LLC and Hawk LLC spent over $1.6 million on 15 units in nine different buildings in Newhallville, Beaver Hills, and Wooster Square.

Also active in the city’s housing market this year was Monsey, N.Y.-based landlord Barnett Brodie, whose Reichman Brodie Real Estate LLC spent over $1.1 million on 23 units in nine different buildings in Fair Haven, Newhallville, and Cedar Hill.

Private landlords weren’t the only ones active in New Haven’s low-income housing market this year.

Elm City Communities/Housing Authority of New Haven (HANH), which manages 1,849 low-income public housing units and funds 5,376 Section 8 Housing Choice Vouchers throughout the city, cut the ribbon this year on the first two buildings and first 90-plus apartments at Mill River Crossing, the public housing complex formerly known as Farnam Courts.

In a recent presentation to the city’s new Affordable Housing Task Force, Livable City Initiative (LCI) Executive Director Serena Neal-Sanjurjo and Elm City Communities Executive Director Karen DuBois Walton said that 1,500 new affordable housing units across a variety of publicly and privately-subsidized projects are currently in development.

They said, however, that the city needs an additional 25,000 affordable units to meet current demands.

Click here to download Neal-Sanjurjo and Dubois-Walton’s task force presentation, which includes slides on a range of other affordable housing developments currently in the works.

Too Much Mandy?

Tenants at Mandy’s newly acquired properties expressed concern about the reputation and, in some cases, the actions of their new landlords.

Tenants at the 202 – 208 Sherman Ave. apartment complex criticized Mandy for buying up properties en masse and then refusing to invest in maintenance. One tenant who identified himself as Williams said his new landlords had to put him and a few other tenants up at a nearby hotel for a few nights because his electricity was cut due to miscommunication between Mandy and the power companies.

“Now I got no meat,” Williams said about a refrigerator full of spoiled food.

At the Chamberlain Court condominium complex in the Annex, one tenant named Shelly accused Mandy of buying up foreclosed properties for dirt cheap and then putting little to no money into maintenance.

“They suck,” she said about Mandy’s reputation.

In response to each complaint, Mandy property manager Yudi Gurevitch affirmed his company’s commitment to being responsive and responsible to its tenants.

“Our tenants are our top priority,” Gurevitch said in an emailed statement in regards to the Chamberlain Court complaint. “[E]very maintenance need is taken very seriously and we have an amazing team of staff ready and able to take care of every maintenance request.”

City Building Official Jim Turcio said that, in comparison to five or six years ago, when his department frequently chased down Mandy for building code violations, 2018 was a quiet, and compliant, year for Mandy properties. Turcio said in an interview that he could not think of any outstanding concerns his department has with any Mandy buildings at the moment. 

“Nothing comes to mind,” he said. As for whether or not Mandy’s buying spree will change how his department approaches its work, ​“we go about our business as usual.”

DuBois-Walton, who sits on the Affordable Housing Task Force in addition to serving as the city’s Housing Authority director, declined to comment on Mandy or on any other particular landlord’s influence on the low-income housing market. However, she cautioned, the city should be wary when one player accumulates so many properties.

“I think that in general it is important for city officials to watch the impact of any one landlord on the market,” she said. ​“Competition drives quality and cost. Should any one entity control too significant a portion of the market, there will be concerns about both quality and cost. This is something that city officials should continue to be attuned to.”

Mandy was cited by the Health Department a few times this year for toxic levels of lead paint at properties it owns throughout the city. In response to each lead abatement order, Yudi Gurevitch responded that Mandy had relocated the affected tenants and begun abatement of the properties.

One local affordable housing advocate expressed concerns about Mandy’s year of frenzied buying up of low-income housing units in New Haven.

New Haven Legal Assistance Association attorney and mayoral hopeful Liam Brennan, who is a member of the Room for All coalition, said he has two primary questions after Mandy’s recent spree: Is the company spreading itself too thin with so many recent purchases, thereby setting itself up for inevitable failure at maintaining its properties in safe and sanitary conditions? And does the ever-expanding size of the Mandy empire give the company too much control over New Haven’s low-income housing market?

“The vastness of the ownership does raise anti-trust concerns,” he said, ​“and whether they can corner the market and really cause cost shifts in the market to the detriment of residents.”

Brennan also said he worries that a cash-rich real estate empire like Mandy’s may potentially stymie low-income residents from becoming first-time homeowners. He said Mandy can afford to buy properties above their market values, thereby taking those properties out of a cost range that neighborhood residents may be able to afford.

Mandy’s vast resources allow the company to ​“take these properties off the market” and create a sort of monopoly on low-income housing, he said. ​“That’s a big concern.”

Lastly, he said Mandy’s perpetuation of the common large landlord technique of buying properties under multiple LLC names contributes to a lack of transparency and accountability in the city’s low-income housing market.

“For enforcement purposes,” he said, ​“we need to be able to aggregate these properties by property manager. It shouldn’t be that hard to do.”

An earlier version of this article incorrectly stated that Ocean Management owns 66 Norton St. The actual owner of 66 Norton is Ernest Schemitsch.

Previous property sale coverage:

• Mandy Empire Buys Up The Block
• Roots Planted In Newhallville
• Latest Sales: Mandy Buying Spree Continues
• Latest Sales: Mandy Expands In City Point
• Latest Sales: East Rock Home Buy Tops $1M
• Latest Deals: Beulah’s 5th Rehab On Block
• Latest Sales: NHR Sheds Small To Focus Big
• Latest Sales: Mandy Buys In Heights
• Home Sale Price Doubles In 13 Years