The Dumbest Of The Dumb Money Has Finally Decided Now Is The Time To Buy Manhattan Apartments

Ring the Bell for Manhattan Real Estate: Calpers Buys the Top Again (Liberty Blitzkrieg, April 17, 2013):

The dumbest of the dumb money has finally decided now is the time to buy Manhattan apartments.  The California Public Employees’ Retirement System (colloquially known as Calpers) just loves taking assets off of other people’s hands at the top.  Let’s not forget the 10,200-acre desert site in Arizona they bought for $400 million in 2006, which was then sold for $32.5 million in 2011.  Well the not so savvy managers of California’s retirement funds are at it again, once again paying the sum of $400 million, but this time for 345 apartments in Manhattan’s wildly overinflated real estate market.  If there was ever the equivalent of a bell ringing at the top this has to be it.

From Bloomberg:

The California Public Employees’ Retirement System bought 345 apartments in two adjacent Manhattan towers from a partnership including Carlyle Group LP (CG), gaining rentals in New York as lease rates approach a peak.

The purchase includes 136 units in the Aldyn on Riverside Boulevard and the 209-unit Ashleyon West 63rd Street, HFF Inc. (HF), the broker on the sale, said in an e-mailed statement, which didn’t include the transaction’s terms. Calpers, as the Sacramento-based fund is known, made the purchase through Boston-based GID Investment Advisers LLC, the pension’s real estate manager for residential transactions.

The price was about $400 million, according to a person with knowledge of the deal, who asked not to be named because the details are private. On a per-unit basis, it was the most expensive deal for more than 100 units on the Upper West Side since the 2007 purchase of the Apthorp, according to data from New York-based research firm Real Capital Analytics Inc.

If you fell for the “buy to rent” strategy in the latest phony housing bubble, I’d consider getting out while you can.

Full article here.

In Liberty,
Mike

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