Greenbrook Partners has been under an unwanted spotlight since last year, when tenants in Park Slope buildings it acquired began fighting non-renewal notices. The renters even got Sen. Charles Schumer to stroll over from his home nearby and join an October protest.
It turns out that Greg Fournier’s Manhattan-based real estate firm was already under investigation for tenant harassment and uncorrected building violations, one that concluded with a settlement announced Wednesday.
The list of penalties and other sanctions is long, but its financial impact on the company, which owns 188 buildings with about 1,000 units, might not be as severe as the press release makes it sound.
The settlement covers 22 of those buildings and requires Greenbrook to issue a $7,500 rent credit to every tenant who moved into 10 of them on or before July 1, 2021. That’s about two months’ rent at a typical one-bedroom apartment in New York City, although it would cover significantly more for rent-stabilized units, which are prevalent in Greenbrook’s buildings.
Fournier and Greenbrook will also pay $100,000 to the city Department of Housing Preservation and Development, hire external monitors to oversee construction activity and compliance, and correct hundreds of violations across 22 buildings within 60 days.
Greenbrook bought a slew of buildings, mostly in Brooklyn, from 2019 to 2021 and began renovations. Its business model is to acquire underperforming properties, fix them up and charge higher rent.
The strategy went awry at 70 Prospect Park West, a dated, market-rate rental building on Park Slope’s priciest corridor. A bunch of the tenants objected when Greenbrook said their leases would not be renewed, generating a heap of news coverage, a rally by “good cause eviction” supporters and public criticism from the Senate majority leader.
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But HPD had begun “comprehensive litigation” against Greenbrook months earlier, in December. Later, perhaps prompted by the publicity, the city and state’s Tenant Harassment Prevention Task Force got involved and expanded the probe.
The task force includes the state’s attorney general and Division of Homes and Community Renewal and three city departments: Housing Preservation and Development, Buildings and Law.
As Greenbrook bought buildings and took over their management, tenants at some of them reported unsafe conditions, unpermitted construction, warehoused apartments, lack of maintenance and repairs, failure to comply with rent regulation requirements, and harassment, officials said.
The task force found Fournier and Greenbrook “engaged in dangerously negligent conduct in the ownership, management, and operation of the buildings,” such as construction that at times left tenants without water, heat or gas.
The 22 buildings in the settlement, totaling 288 units, have 705 open code violations with HPD. Overall, Greenbrook’s portfolio has more than 1,200 open HPD violations and 700 building violations. They include lead-based hazards, unsafe or exposed electrical wiring, leaky roofs, lack of cooking gas, vermin, missing or defective smoke and carbon dioxide detectors, and construction work without a permit.
State officials did not say how many of those violations pre-dated Greenbrook’s ownership. The firm’s website says Greenbrook “targets investments in poorly maintained, undermanaged and undercapitalized assets located in growth-oriented and transitional submarkets of New York City,” upgrades their systems and makes them energy-efficient.
Greenbrook partnered with the Carlyle Group in December to purchase about 45 buildings. It does not appear that any of those are involved in the settlement, which did not include Carlyle.
“Putting this settlement behind allows us to focus on our long-term commitment to New York City and on investing in high-quality housing at a time when it’s desperately needed,” Greenbrook said in a statement. “While many abandoned the city during the pandemic, we continued to invest in its physical and social future.”