NEWARK-TreeTop Development recently completed the purchase of three rental communities here totaling over 450 apartment homes in Essex County. The transactions are representative of a new investment strategy implemented by the locally based developer and owner to take advantage of today’s market conditions by purchasing high-performing and well-located HUD apartment assets.
The aggressive philosophy has enabled TreeTop to grow its portfolio of rental apartments in Essex County to over 1,500 units at a time when many property owners have slowed pursuing multifamily investments. “Economic concerns and challenges over the past few years have certainly created new opportunities in the real estate industry for multifamily property owners and investors,” says Adam Mermelstein, a TreeTop principal. “We’re consistently monitoring industry conditions and identifying strategies that could strengthen our presence in local markets and add value-laden properties to our portfolio,” he tells GlobeSt.com. “Purchasing high-quality HUD apartment assets is one of these avenues.”
Among the properties TreeTop acquired was Aspen Riverpark. Built in the 1940s as housing for Prudential Insurance employees, the complex features 258 rental homes in Newark’s popular Ironbound district. TreeTop plans to invest $1.5 million in capital improvements that include new landscaping and upgraded lobbies and common areas.
The second acquisition, Aspen River Park, was purchased by TreeTop with New York City-based Latus Partners LLC, a real estate private equity fund that invests in a variety of opportunistic, distressed or transitional real estate transactions using equity, debt and hybrid structures.
“Our relationship with Latus represents one of the few occasions a New York City real estate fund has shown a willingness to invest in an New Jersey urban asset, particularly a HUD property,” adds Azi Mandel, another TreeTop principal. “This is a trend we expect to explore further as more financial partners look to urban centers outside of Manhattan due to the lack of housing product that generates immediate capital income available in the city.”
TreeTop Development also purchased Aspen Temple, an 88-unit HUD complex on the corner of South 10th and 11th streets, which is 100% occupied, and it is under contract to purchase 115 HUD apartments located adjacent from Society Hill at 135 Prince St.
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