Kislak VPs Donald Baxter and Jonathan Greenberg represented both the seller and the buyer. Baxter declined to name the parties--both private entities--involved in the transaction, but tells GlobeSt.com that the seller intends to focus on other types of real estate. He would only specify that the buyer is a private investor active in the area.
The properties trading are: a 37-unit, five-story property at 6611 Broadway; a four-story building with 17 apartments and one retail space at 5902 Madison St.; a 19-unit, four-story asset with one retail space at 6120 Monroe Pl.; and a 24-unit, four-story property at 6204-6210 Palisade Ave. The brick walk-up buildings offer studios as well as one- and two-bedroom units.
According to Baxter, three of the four properties, excluding the one along Palisade Avenue, had been put on the market previously with other brokers. Kislak obtained the exclusive listing two months before the deal closed in late July.
Making the deal attractive to the buyer was that even though the apartments are rent-controlled, rents can be increased when a vacancy arises. "The township will allow increases based on renovation, but only upon vacancy," Baxter says. "Over time, the rents will go up considerably." Baxter declined to specify the occupancy rate at the time of the sale.
The buyer's financing was arranged by Elliot Treitel of Meridian Capital. He tells GlobeSt.com that the mortgage was funded by a local New Jersey savings bank. The non-recourse loan was underwritten at a 75% loan-to-value ratio and 6% interest rate, with a five-year term and a 30-year amortization. The cap rate was 7%, which was justified given the potential to raise the below-market rents in the buildings, Treitel says.The buyer was represented by Larry Raiss, an attorney with Feinstein Raiss Kelin & Booker in West Orange. Attorney Jonathan R. Mehl of Rutherford advised the seller.
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