Alex. Brown Realty, Inc. and TreeTop Development Acquire Apartment Complex in Newark, New Jersey
Contact: Thomas R. Burton
Baltimore, MD (January 8, 2008) - Alex. Brown Realty, Inc. (ABR), a national real estate investment company, has entered into a joint venture with New-York based TreeTop Development to acquire Parkwood Place, a 293-unit apartment complex in Newark, New Jersey. ABR Chesapeake Fund III, a value-added real estate investment fund sponsored by ABR, provided an equity commitment of $6.1 million to the venture. Joel Mazur and Scott Assouline of Meridian Capital Group’s New York office arranged the debt and equity capital for the transaction.
The acquisition marks ABR’s first investment in Newark. “Newark is a viable, growing market,” commented Tom Burton, ABR’s vice-president and chief investment officer. “The city has seen a substantial amount of private and public investment in recent years – the new $375.0 million Prudential Center arena is a great example – and that trend looks to continue in the near future. That level of investment has undoubtedly impacted Newark’s economy. As a result, we see a market with solid projected population growth and a diverse employment base. We also see a market poised to benefit from the growth in Manhattan and other New York metropolitan area communities -- rising housing costs in these communities have pushed more residential into Newark and the surrounding areas.”
Parkwood Place, which consists of seven, six-story, elevator-served buildings constructed in the late 1940s, is located in Newark’s North Ward neighborhood, adjacent to the North Ward Center and the Robert Treat Academy charter school. Current vacancy for apartment units in the submarket is approximately 5% and many properties in the submarket are experiencing full occupancy. Vacancy at Parkwood Place is currently less than 4%.
The joint venture intends to add value to the complex by implementing a concentrated, hands-on management approach and a $1.4 million property improvement plan that focuses on renovating interior units as tenancy rolls over, upgrading common areas, and completing key exterior improvements. Both moves are expected to enable the joint venture to bring rental rates in line with current market conditions.
“Parkwood Place is a solid investment that should generate strong returns to our investors,” commented John Prugh, ABR’s president and chief executive officer. “We have strong existing cash flow, attractive debt financing in place, and the benefit of working with a local JV partner that has extensive experience in owning, managing, and redeveloping core, urban, residential assets.”
Alex. Brown Realty, Inc. (ABR) is a privately owned real estate investment manager organized in 1972 and headquartered in Baltimore, Maryland. ABR co-invests with joint venture partners in a broad spectrum of property types located throughout the United States. www.abrealty.com
TreeTop Development (TreeTop) is a New York-based real estate investment firm formed in 2005 that focuses on acquiring, renovating, and repositioning apartment buildings in key urban centers throughout the metropolitan New York area. www.treetopdev.com
Meridian Capital Group LLC (Meridian) was founded in 1991 and is one of the nation’s largest real estate investment banking firms serving the multifamily and commercial real estate sectors. The company is based in New York City and has additional offices throughout the United States. Meridian finances transactions ranging from $500,000 to more than $500 million for multifamily, co-op, office, retail, hotel, healthcare, self-storage, industrial, and construction properties. Nationally, Meridian reported more than 2,500 transactions in 2006, totaling over $17 billion.