(Mark Your Calendars: RealShare New Jersey 2011, September 13 in New Brunswick. RealShare New York takes place Oct. 12 at the Marriott Marquis.)
NEW YORK CITY-In continuing its Manhattan acquisition spree, publicly-traded multifamily REIT UDR, Inc. completed its acquisition of the 14-story, 210-unit 21 Chelsea luxury apartment building from owner 21 Chelsea LLC for $138 million on Friday morning. The transaction is the latest deal to close in UDR’s current credit facility, which also includes the 706-unit, 35-story Rivergate apartment tower in Murray Hill and the 185-unit View 14 in Washington DC. In total, the three communities were acquired for $687 million.
Tom Toomey, president and CEO of UDR, says the latest acquisitions are all part of the company’s new Northeast strategy. “It continues our portfolio transformation of owning apartment homes in markets characterized by above average job growth, low home affordability and limited new supply, three of the key drivers to strong rental growth,” Toomey says, in an earnings report. The company now plans to redevelop all three of the buildings with new improvements and amenities.
Located on 21st St. between 6th and 7th Avenues, the 21 Chelsea features a 24-hour doorman, a rooftop deck, laundry facilities and a valet service. Following today’s acquisition, UDR plans to invest $6 million to $8 million over the next two years to upgrade the units with new kitchens, baths, cabinets, granite countertops and stainless steel appliances. The company will also make community upgrades, including a redesigned lobby and improving the current rooftop space.
After the redevelopment is complete, UDR anticipates that rents will rise by approximately 20% in the building. Currently, the monthly income per occupied home is $3,226. “We do believe now is a good time to invest in New York City,” said Harry Alcock, senior vice president of asset management at UDR, in a previous interview with GlobeSt.com. UDR also owns the 493-unit apartment tower at 10 Hanover Square in the Financial District, where rents have gone up by 14% since the company acquired the property, he said. “We are moving rents at Rivergate to a similar type percentage. Now is a good time to own multifamily product in New York.”
In addition, UDR has also entered an agreement to acquire the Moinian Group’s luxury 507-unit Dwell95 tower at 95 Wall St. for $325 million just two weeks ago, a deal that further expands the REIT’s presence in the New York market.
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