Capital Realty Group Buys Cathay Manor Senior Housing Complex in Chinatown, Pays Big Mansion Tax
The roughly 270-unit Cathay Manor apartments at 600 N. Broadway in Los Angeles has sold. (CoStar)
By Jack Witthaus
July 6, 2023 | 8:48 AM
A federally subsidized senior housing complex in downtown Los Angeles' Chinatown neighborhood that has struggled for years with animal infestations and maintenance issues has sold to a new owner in what may be the city's priciest sale since a new real estate tax took effect in April.
An entity related to Capital Realty Group — a Spring Valley, New York-based real estate investment firm — bought the roughly 270-unit Cathay Manor at 600 N. Broadway for $97 million, or about $359,259 per unit, according to public records.
The June sale triggered a nearly $5.8 million levy under the city's newly established levy, known as the mansion tax even though it applies to residential and commercial real estate, that applies to transactions or transfers above $5 million. Monies raised from the levy are expected to combat the city's rising homelessness problem and to aid housing affordability.
CoStar data indicates it's the largest sale so far in terms of total price in the city of L.A. since the mansion tax went into effect in April. The transaction is the third-largest in terms of total price in greater L.A. in that time.
Property sales have cooled in the city of Los Angeles since April due to a confluence of factors including the new mansion tax, rising interest rates and economic uncertainty. The tax raised $15.5 million in April and May, according to The Washington Post.
Capital Realty Group plans to make numerous immediate upgrades to the building, including fixing plumbing leaks and addressing hot water issues, according to a statement by the company. In the long term, the company plans to complete a full-scale restoration of all the apartments, common areas and community spaces. These improvements include renovating kitchens, bathrooms and living spaces along with installing new cabinets, countertops and appliances.
"We understand the challenges that the residents have faced due to years of neglect, and we are fully committed to restoring their trust, improving their living conditions, and honoring their cultural heritage," Sam Horowitz, vice president at Capital Realty Group, said in the statement.
The previous owner of Cathay Manor, the nonprofit Chinese Committee on Aging Housing Corp., received condemnation from residents and elected officials in the way the property was operated.
An inspection found that the complex had "rodent and roach infestations, exposed wires and electrical hazards, inoperable fire protection, mold and mildew, and broken sanitation systems," according to a letter by U.S. Rep. Jimmy Gomez and Sens. Dianne Feinstein and Alex Padilla sent to U.S. Department of Housing and Urban Development. Elevator outages also prevented elderly tenants from accessing food or medical services.
Privately held Capital Realty Group owns and operates roughly 17,130 affordable housing units in 27 states, according to its website.
Cathay Manor was built in 1983 and sits on 1.3 acres, according to CoStar data.