A Jamaica-based landlord that collects rent from 1,600 apartments in Queens has made its first foray into Long Island with the renovation of a 346-unit Hempstead building.In the coming years, Zara Realty - run by three brothers in the Subraj family - says it intends to bring to other parts of the Island its formula of buying, fixing and remarketing apartment buildings." We''''''''re here to stay, and we want to buy more and improve more buildings," said George Subraj, one of the brothers.
Since the brothers bought the bedraggled Hempstead apartments at Fulton Avenue and Elk Street at the end of 2002 for $14.5 million, they say they have put $4 million into the three-building complex. They''''''''ve paved the parking lot, renovated the lobby and put in new elevators, security cameras and a 24-hour doorman.
Zara Realty is also renovating individual units at about $12,000 a piece as they are vacated. No one is being forced out, Zara said. So far, about 170 of the 346 apartments have been upgraded with new kitchens and bathrooms and hardwood floors and have seen about a $300 monthly rent increase, Zara said. Studios now go for around $900 and one bedrooms around $1,190. Area brokers said those figures are market price. However, Hempstead Village Housing Authority Director Jamie Morrison said he worries that the increase in rents could price some people out of the rental market. "It makes it very difficult for the average person ... depending on their income," said Morrison, who said there are about half a dozen residents in government-subsidized apartments in the building. "The rents are already high. "But others welcome Zara''''''''s entry into Long Island, where owner-occupied housing constitutes 75 percent of the market, according to the 2000 Census. "Of course, rents will increase there, but ... when the housing stock improves, it''''''''s actually better for everyone," said Robert Campbell, associate professor of real estate finance at Hofstra University, just blocks from the complex, renamed New Haven Place. "If you look at the total picture," Campbell said, "the big problem we have in Nassau County is that we do not have enough good quality apartment residences, and that makes the inferior apartments more expensive. "Records with the New York City Department of Housing Preservation and Development show that some Zara buildings in Jamaica, Hollis and Jamaica Estates have had multiple code violations, ranging from roaches and mice to defective smoke detectors. In New York City, "All buildings have issues, and I guarantee you my buildings have the minimum issues," said Ken Subraj, one of the principals at Zara. "My typical project only has 10 to 15 violations. Other people, you have hundreds.
"Experts expect the rental market on Long Island to be strong for the foreseeable future. Campbell of Hofstra said there is a unique gap between the monthly costs of rentals and sales because of recent home price increases. "I expect this gap to close, but it is not going to close entirely by sales prices falling," he said. "As soon as sales prices stabilize, then people no longer anticipate the capital gains, and ... the rental option becomes more attractive."