EXACTLY one year after he founded Broad Street Development, investor Raymond Chalme has just bought two very different, next-door rental apartment buildings on the Upper East Side – 1430 and 1438 Third Ave. between 81st and 82nd streets.
Broad Street, led by Chalme and Daniel M. Blanco, bought the properties for $85 million from General Investment Development Cos.
Chalme plans to spend $15 million more on capital improvements at 1438 Third, a 31-story tower with 147 apartments, many with terraces, and 14,000 square feet of store space.
No. 1430 is a six-story, 21-unit, elevator building that went up in 1898.
Last September, Broad Street made its first purchase with the 635,000- square-foot office building at 61 Broadway.
Earlier this year it snatched up a small apartment building on Thompson Street in the Village, also from General Investment Development.
“I was shocked looking at 1438 Third for the first time,” Chalme says. “It has Central Park views from rear and views up and downtown.”
The views are safe, he said, because the original developer bought nearby air rights. Does the purchase mean Broad Street, named for a street in the financial district, is shifting its focus to the Upper East Side – once Manhattan’s most desirable neighborhood, but long since eclipsed by trendier precincts downtown?
“I’ve been downtown, but I go where the opportunities are,” Chalme said with a chuckle. “They’re not making any more land there.”
He pointed out that among the Upper East Side’s large rental buildings that went up in the 1960s and ’70s, “some of them need TLC – both the apartments and common areas have been neglected.”
He noted that where TriBeCa, for example, has “all-new buildings renovated to a high quality, the Upper East Side has a lot of cookie-cutter rentals.”
Broad Street is proceeding methodically but cautiously. “Generally, I like things with a limited downside,” Chalme said. “I have a bit of a conservative side, having lived through the ’90s.”
He noted that the two buildings have “under-market rents” and that the “condo market has taken off like a rocket.”
However, like most investors who are snatching up rental apartment buildings, he declined to comment on whether a condo conversion might be in the offing.
What about the much-feared bubble-bursting in the residential market – endlessly discussed, but for which there is so far zilch evidence?
Is the Manhattan market insulated from what might happen elsewhere?
“Manhattan is unique, but nothing is unaffected in this world,” Chalme said. “I don’t know if a bubble necessarily bursts – but there’s got to be a leveling off.”