EAST ORANGE, NJ-Gaia Real Estate Holdings and Harel Insurance have acquired the Grand at 650 Park Ave. and Renaissance at 394 S. Harrison St., two class A apartment buildings here for a total of nearly $19 million, GlobeSt.com has learned.
The 62,500-square-foot, 58-unit Grand, to be renamed the Gaia Grand, was purchased for $10.65 million. The price of the 50,000-square-foot, 61-unit Renaissance, now the Gaia Renaissance, was $8.33 million. Both buildings are nearly 100% occupied. The Gaia/Harel joint portfolio now owns three properties in East Orange, and six overall in the Tri-State area.
“We believe in the economics of the area,” Amir Yerushalmi, New York City-based Gaia’s co-founder, tells GlobeSt.com. “There are a lot of employers around here, and it’s hard to get things on line.” The partnership is on track to acquire another multifamily project with 372 units in the state for $44 million next week.
The two buildings are located near 320 S. Harrison St., which the partnership acquired a year ago. The Gaia Renaissance, in fact, will share a management team with 320 Harrison.
The newly acquired East Orange properties have a net operating income reflecting an annual unlevered yield of 7.5%, according to Gaia and Harel. A regional bank financed the acquisition at 75% loan-to-value and a fixed interest rate of 4.8%.
Harel is the third largest insurance firm in Israel. The two companies formed the partnership one year ago to acquire distressed real estate in the New York area, with Harel investing up to 50% of the partnership. The newly acquired properties themselves were not in distress, Yerushalmi emphasizes, though “there was some distress on the ownership level.”
The partnership is continuing to look at multifamily and residential acquisitions, even expanding geographically to Boston and Philadelphia. “We view the US as an important real estate market central to our investment strategy,” says Gadi Ben Haim, the head of real estate investments for Harel, in a statement unveiling the deal. “The recent investments by Harel in this market were made after long and exhaustive research of various markets, sectors and major operators, all in order to maximize Harel’s returns.”
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