As managing principal of Castellan Real Estate Partners in New York City, Paul Salib oversees the firm’s investments in debt and equity real estate transactions. At Castellan, Mr. Salib has overseen real estate transactions with a market value in excess of $700 million. When away from Castellan, Paul Salib also works at Schack Institute of Real Estate at New York University as an assistant adjunct professor.
Castellan recently sold a four-building portfolio of East Harlem rental properties to the Emerald Equity Group in August 2017 for $24.8 million. Three of the buildings on East 117th Street feature a few commercial units along with more than 100 residential units. Of the $24.8 million, Emerald paid $9 million for the 1661 Park Avenue location that features 34 rental units and a single retail unit in 22,000 square feet of space.
Castellan bought the properties in 2013 for $13.5 million, believing that there would be an increase in demand for real estate in the neighborhood. As property values rose in Upper Manhattan, families started looking to East Harlem for housing. There is a perception that the neighborhood has improved since the acquisition.
Castellan Real Estate Partners is led by its founder and managing partner, Paul Salib. Backed by a significant amount of private capital, Paul Salib’s company is known for making sizable profits on in-demand real estate properties.
Castellan Real Estate Partners recently sold an East Harlem multifamily property to Emerald Equity Group, led by real estate investor Isaac Kassirer. Emerald Equity paid Castellan Real Estate Partners nearly $25 million for the four-building portfolio of mixed-use rental properties, according to the Commercial Observer, New York’s expert source on commercial real estate deals. Castellan acquired all four of the early 20th-century walk-up buildings for a combined $13.5 million in 2013.
With a total of more than 100 residential units and three commercial units, the three buildings on East 117th Street have a combined 42,000 square feet. The fourth property is on Park Avenue and covers 22,000 square feet.
An assistant adjunct professor at New York University, Paul Salib is founder and managing principal at Castellan Real Estate Partners in New York City. Since 2009, Paul Salib’s firm has been involved in real estate transactions exceeding $750 million in market value.
Castellan holds properties long-term and favors properties possessing long-term value potential that can be achieved through sound property maintenance and management. For the company, this equates to being receptive to the needs of its residents and dealing with them in a fair and honest manner. A great source of tension between residents and their landlord is the poor or decaying condition of the rental property.
Castellan frequently buys properties in a neglected state and devotes a significant amount of capital to bring these properties up to standard. This includes replacing boilers and converting them to natural gas for reliability and cost effectiveness, installing new dual-pane windows for improved insulation, restoring building facades, and adding video cameras for increased security, among many other improvements.
Open dialogues between tenant and owner bring to light many issues, helping to minimize building code violations. Castellan notes that responsive owners have happier residents who consequently are more likely to pay their rent on time.
Over the course of his career in New York real estate, Paul Salib has developed experience across a range of transactions. As managing principal with Castellan Real Estate Partners, Paul Salib incorporates components of value investing during the investment process.
At the most basic level, value investing refers to the trading of stocks below their intrinsic value–in other words, the actual per-share value of the underlying business. A stock’s intrinsic value may or may not align with its market price, or the actual price at which a stock is traded. Value investors look to purchase stocks when the intrinsic value rises above the market price, and sell stocks when the market price eclipses the intrinsic value.
Value investing can take a number of forms, depending on the objectives of the investor. Investing guru Warren Buffett famously invested in “cigar butt” value investments, which gave investors a few free “puffs” before the intrinsic value and market value realigned. At other points in his career, Buffett sought out value investments with more stable outlooks in the long term. These long-term value investments often straddle the border with growth investing, which attempts to identify companies with high potential for growth and invest in them for long periods of time.