The apple doesn’t fall far from the tree, although sometimes not exactly under it.
Jeff Sutton, arguably the most successful owner of a closely held retail portfolio in New York City, has steered clear of residential assets for years. From Fifth Avenue to Soho and from Brooklyn to Queens, his multi-billion dollar holdings include more than 100 properties and are virtually entirely retail. If he buys a residential building, such as the one he did at 332 West 125th Street, it’s with an eye for retail conversion.
But his 24-year-old son Joseph, instead of keeping his eyes on street-level storefronts, is taking a look upstairs at the apartments.
Joseph Sutton acquired three residential properties this year, and has his eyes set on more, according to property records and industry sources. Some insiders believe retail prices have peaked, and view residential as a more stable and conservative long-term investment. In fact, Joseph Sitt‘s Thor Equities has put on the market a large collection of properties with brokers saying it’s to take advantage of the high pricing.
In March, Joseph — with most of his backing from his father — paid $11 million for a four-unit West Village building at 275 Bleecker Street, which has retail at the base. In April, he purchased 132 and 134 Jefferson Street in Bushwick, for a total of $6 million. The two buildings together have 12 residential units, and no retail space. And he is moving to buy another apartment building in Brooklyn soon, sources familiar with the deal said.
The firm does not yet have a name, but could be a version of Jeff’s Wharton Properties.
Joseph and Jeff did not respond to a request for comment.
Branching into residential isn’t a new play for retail-focused moguls. Thor Equities launched a residential investment division in 2013, and since has been involved in more than $700 million worth of residential acquisitions, according to an analysis of data on Real Capital Analytics. The acquisitions include 30 Park Avenue in Murray Hill, which is now majority-owned by Rubin Schron’s Cammeby’s International Group.
Joseph’s investments, however, have been far more modest, and insiders said it will likely stay that way. He joined his father’s firm Wharton Properties in 2014 as director of acquisitions, after a stint at Meridian Capital Group.