The partnership, arranged by New York City real estate investment banking firm Sonnenblick-Goldman, will develop $500 million to $700 million worth of rental and condominium projects and is seeking additional co-investors on a one-off basis for individual Clarett Capital LLC developments.
PREI vice president Len Kaplan tells GlobeSt.com the venture's "primary focus will be in Manhattan, but we would not exclude the outer boroughs as well." The impetus behind the partnership, he notes, was both opportunistic and strategic. "There's client demand for [residential development], and while New York City is going through a very tough time right now, the residential market is very resilient." However, he says, the opportunity to work with Clarett was also a major factor in the decision to make such a large-scale commitment.
Sonnenblick played a key role in facilitating that partnership, Kaplan states. "Sonnenblick-Goldman was instrumental in introducing Prudential to Clarett and started the ball rolling in our discussions."
Kaplan notes that because the venture is pursuing ground-up construction opportunities, "it takes a couple of years to develop" such projects, therefore, "we would bring them online in 2005 or 2006, which is fairly timely for us."
In terms of scope, Kaplan says the venture has "a fairly wide mandate, because New York can be a tight market with high barriers to entry." In addition, because each project will largely hang on "the timely acquisition of sites," size and use of each development has yet to be determined. But the plan coming out of the box includes condominium and rental projects in the mid-market to high-end range.
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