(To read more on the multifamily market, click here.)
PHILADELPHIA-Jeffrey Reinhold, CEO of locally based Historic Landmarks for Living, has formed JA Reinhold Residential, designed specifically to turn multifamily rental properties into for-sale condominiums. The new company acquired five buildings here in July 2006 from partners in Landmarks for Living for an aggregate of $88 million. Two of the properties are now being renovated for conversion.
Locust Point, a 110-unit building at 2429 Locust St. in the Fitler Square neighborhood, and the Lofts at Logan View, a 108-unit property at 1666 Callowhill St. in the Logan Square neighborhood, are being redeveloped. Locust Point is a historically certified building, which Reinhold says was acquired for $20 million. He is investing $9 million in upgrades that include a renewed façade, renovated lobby and common areas and all new windows, kitchens and baths.
Marianne Harris, president of the new company, is handling sales and marketing in house. She tells GlobeSt.com the prices for one-bedroom units range from $279,400 to $426,450, while two-bedroom units sell for between $386,250 and $457,700. The building contains 75 indoor parking spaces that are priced at $35,000. Over the opening three weekends, she says she obtained nine agreements of sale and 11 deposits.
The Lofts at Logan View is mostly loft units, according to Reinhold. "This is the former Harrington Hoist Co. industrial building that dates back about 100 years and was later converted into luxury rental apartments," he says. JA Reinhold paid $18 million for it and is investing $7 million in upgrades. Prices for a junior-bedroom begin at $272,400, and two-bedroom bi-level units of nearly 1,200 sf are priced at $484,000.
The other three buildings the new company acquired will remain rental, but also receive upgrades, Reinhold says. They are the 150-unit Packard Motor building at 300 N. Broad St.; the 120-unit art deco-style Metropolitan building at 15th and Cherry streets, and Old Quaker, a 76-unit building at 35th and Lancaster streets near Drexel University.
"You can't buy land and build for-sale units in Center City at the prices we're asking, and it's nearly impossible to obtain land near Center City," Reinhold says. "We're targeting young professionals and families with affordable luxury units –a market that is underserved here. I'm not concerned about the other condos being built here now."
The two JA Reinhold conversions underway, he says, "are a model for taking urban multifamily properties to for-sale condos in other parts of the country." Landmarks for Living owns and operates 20 multifamily rental properties in nine cities. While these five buildings are from Landmarks for Living's portfolio, Reinhold says the model won't necessarily be limited to Landmarks for Living assets as his company expands to other cities.
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