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New York Investor Quietly Acquires City Apartments

Marks Group buys up 2,000 city apartments

By LAURA SCHREIER, Hartford Business Journal Staff Writer

February 11, 2008

A New-York based investor, the Marks Group, has been quietly buying up apartments in the city, and has assembled a multifamily portfolio of more than 2,000 apartment units to date.

According to Boston-based Warren Group and city records, the investor closed on about 15 properties.

The company’s owner has his eye on owning fully 50 percent of the Hartford multifamily market, said Sandy Strickling, a broker who represented Marks Group on one of the purchases.

“I don’t think he has 50 percent yet, but he’s obviously doing very well with the market — he’s aggressively buying,” she said.

The units are scattered around the city, but most are located in Hartford’s southern and western neighborhoods. Strickling said Marks is owned by an experienced investor, with property in other markets such as New York and Chicago.

Unusual Strategy

But other real estate officials have expressed concern. Mark Bates, managing director of real estate research group Integra, said it’s unusual to see one investor attempt to take up such a large chunk in one market. Most national investors try to diversify their holdings, he said.

Bates agreed that such an investor likely sees potential for the area, such as an increase in jobs, although Integra’s research shows the Hartford market as stable, but not particularly hot right now. Such a situation might create a disruption in the market, Bates said: with a powerful hold on Hartford, rental rates could go up.

“There are ramifications when someone takes up that kind of position in the market,” he said.

Strickling, who along with her business partner was working for Prestige Properties during the Marks Group purchase, arranged a sale of 222 units for $11.6 million — a large deal, but only a fraction of Marks’ activity in the area. While the Marks’ Hartford ambitions are significant, local brokers say that such large holdings are not unheard of.

Steve Witten, senior director of the National Multi Housing Group for New Haven-based Marcus & Millichap, agrees that many single investors — using multiple business names and attracting less attention — own larger chunks of similarly sized housing.

It’s often a smart move to buy up such large amounts of housing in a single market, he said, because owning so many units creates costs efficiencies and makes it much easier to mop up potential renters in a given market. If one building has no vacancies, the owner will be ready with a whole list of other openings in buildings under the same ownership.

Robert Sandell, the principal owner of Marks Group, according to state business filings, did not return phone calls as of press time.