Floyd Mayweather, Jr. turned industry heads last October with a record-scratch of a deal: $402 million for 1,000 affordable units in Upper Manhattan.
Black Spruce Management owned the buildings. Details, otherwise, were scant.
In February, Mayweather offered a bit more color in an Instagram post flaunting his new assets and the investment firm he’d launched to buy them: Vada Properties.
“Lately, I purchased 62 apartment buildings in New York City,” the retired boxer said in a video.
“Guess what: All the buildings belong to me; I don’t have no partners.”
On Monday, Business Insider seized on those words in an article questioning whether the deal had happened at all. Property sales show up in city records, but weeks after Mayweather’s post, nothing had been recorded.
“There is no evidence there has been a sale,” the publication reported.
The truth lies somewhere in the middle.
Mayweather did ink a $402 million deal for a Black Spruce portfolio, sources close to the transaction confirmed. The heavyweight champ scored a minority stake in most of the 62-building portfolio and an option to buy the remaining properties outright.
Jost Gotlib’s Black Spruce is still the majority owner, which is why a sale didn’t hit records — a deed didn’t change hands. The firm declined to comment.
As for Mayweather’s word choice, his team ascribed it to miscommunication. When the former athlete said he didn’t have partners, he meant no one was funding his investment but him.
“The money I used to purchase all of the real estate deals is my own hard-earned money,” Mayweather said in a statement. “I didn’t raise it, syndicate it or borrow it.”
Word choice aside, a check in on the deal reveals Mayweather has tapped into a novel strategy to squeeze profits from assets most believe to be dying on the vine.
The Morningside Heights portfolio is rent-stabilized and, notably, collateral for Signature Bank debt the industry called “toxic” after the lender flopped in 2023.
Since a 2019 law severely curbed revenues in rent-stabilized buildings, values have plunged and defaults mushroomed. Many owners, seeing no other path to profit, are swallowing their pride, selling to bottom feeders and trying to move on.
It doesn’t seem that Mayweather spent hundreds of millions on that type of distressed investment.
Many of the Morningside Heights buildings benefit from two government programs — Article XI and Section 610.
Article XI is a complicated tax cut with an incredible 40-year lifespan for properties that have been renovated; it provides a break on the expense side of the operating equation.
Black Spruce secured the exemption for much of the portfolio before Mayweather came on board and expects to lock it down for the remaining properties, sources said.
Article XI is another reason Mayweather did not buy the deals outright, the sources added. The city needs to approve the sales of properties that benefit from the program, which is complicated enough. Getting the green light for deals in the processing stage would have been an added headache.
Section 610, meanwhile, acts as a revenue booster.
Under a 2022 state law, the program allows owners leasing to voucher holders to collect the full subsidy amount, even if it’s above the unit’s legal rent. That can be a hefty differential for landlords of older rent-stabilized buildings with rents capped far below market.
At least one-third of the buildings in the Morningside Heights deal scored Section 610 in October, according to property records — a lucky break and good timing.
The city, citing federal uncertainty, said last week it would no longer accept new applications for the program, which allegedly had a waitlist in the thousands.
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