A pair of downstate investors have acquired two of the three Elmwood Village apartment properties that Ciminelli Real Estate Corp. put up for sale in October after the developer concluded they weren't needed for its controversial planned $40 million residential project.
Matthew Hornstein and Maximilian Polsky, operating as M2 Acquisitions LLC, paid nearly $1 million for the two apartment buildings at 721 Ashland Ave. and 584 Potomac Ave., according to documents filed with the Erie County Clerk's Office.
The duo paid $615,000 for the three-story Ashland property – the larger of the two with eight units – and $360,000 for the three-story Potomac house, with six units, including two studios. Both are fully occupied, "so they're good income-producing investment properties," said Renee Moran, founder and owner of Red Door Real Estate WNY, who represented Ciminelli in marketing the two buildings. Both were built in 1925.
"There was a lot of interest in both properties," Moran said, citing multiple offers. The sales were financed by Evans Bank, she said.
A third property at 588 Potomac – with three floors and three units – was also put up for sale at the same time through Red Door, a seven-year-old brokerage firm in the Elmwood Village. Moran said that one is currently under contract to be sold to a different buyer, with a closing "probably a week or two away."
Polsky said the pair will make repairs, upgrades and capital improvements as needed to the two buildings, primarily with one or two units, but "we aren't going to be doing any serious renovations."
"Both structures architecturally are beautiful. We want to make sure we keep and restore them to the best quality they can be in," he said.
Hornstein and Polsky are New York City-based professionals who teamed up to buy real estate, and now own commercial and multifamily properties in Florida, Pennsylvania, Georgia, New York and Virginia.
Polsky would not disclose how many units they now own, but he said they are making acquisitions in a lot of tertiary markets, in neighborhoods where the valuations aren't overheated or based on speculation. And Buffalo is "one of our primary targets right now."
"We look for potential in areas that others might not see," he said. "For the last 10 years, there's been a real estate boom in these big cities, and we don't see the value of the skyscraper condos. That's where we see value in markets like Buffalo."
The pair started acquiring properties in Buffalo in the last year, and currently own properties on Hoyt and West Utica streets, as well as the two new purchases, according to David Vari, the Hunt Real Estate Corp. broker who represented them in the deal. The duo is using the Lodge Group LLC, a local property management company whose co-founder went to University at Buffalo with Hornstein's friends, to oversee their Buffalo holdings.
"They see a massive amount of unrealized value in the Buffalo area, specifically on the West Side corridor," Vari said. "There are a tremendous amount of young people moving back to the Buffalo area, and with that comes a strong demand for housing that the group hopes to fulfill."
Polsky said he has "a ton of friends" from the Buffalo area in New York City, and "they're telling me a lot of their friends are moving back and they can't wait to move back."
"There's a lot of exciting stuff to come, and we're still very bullish on the area," said Polsky, 31. "This is the first of many acquisitions that we'll continue to make in 2018. We don't see the market slowing down anytime soon."
Hornstein, a 33-year-old Philadelphia native, is a graduate of Drew University and New York University's Stern School of Business, and is now a director and global account manager at South Africa-based Standard Chartered Bank in New York City. His wife is an Amherst native.
Polsky, a New York City native, founded MJP Acquisitions LLC, a property development firm that specializes in commercial real estate. He owns self-storage facilities in Florida.
"They are responsible landlords," Vari said. "Their goal is to preserve the character of the homes, to increase value through quality capital expenditures, and to attract good tenants with low turnover."
And while they like the architecture of Elmwood and the West Side, they are "not limiting ourselves to that area," Polsky said.
"We like all of Buffalo. We love spending time there," he said. "We really like the city, and we want to continue digging our feet in and building up something of value. We believe in the long-term value of Buffalo."
Ciminelli had acquired the three Elmwood Village houses along with eight other properties from longtime owners Donald and Lori Leone, with plans for a $40 million project that would include two five-story buildings with 97 residential units, eight retail spaces and 150 parking spaces. As part of the plan, Ciminelli had initially intended to demolish the three homes to incorporate the properties.
But it reversed course amid community outrage and opposition to the overall project, and instead planned to renovate them as stand-alone multifamily homes. Eventually, officials decided the developer didn't need the properties at all, so they relisted them with Red Door as part of an effort to defuse tensions with the community.
Meanwhile, the entire Arbor + Reverie project is currently on hold.