JACKSON, NJ-Phoenix Realty Group and a venture of Gaia Real Estate Holdings and Harel Insurance Investments and Financial Services will acquire the Regency Club Apartments at 330 South New Prospect Road here for $44 million, at a cap rate of 7.35%.
PRG made the investment on behalf of a PRG institutional real estate fund focusing on residential assets in the tri-state area. It is PRG’s first deal with Gaia. The 31-building, 372-unit complex serves middle-income rentals.
“We had been trying to consummate our first deal with Gaia for quite some time, and this opportunity came up,” Steve Scioscia, PRG senior VP, tells GlobeSt.com. PRG assumed a $32.2 million Fannie Mae loan with 7 years to maturity at an interest rate of 5.9%. The seller is an affiliate of Morgan Management, a Pittsford, NY-based private apartment operator.
The project is located near Interstate 195, the Garden State Parkway and the New Jersey Turnpike, giving residents easy access to Trenton and the office markets in Central and Northern New Jersey. The complex, while in good repair, has a dated interior. Plans call for a $2 million improvement program that will modernize the units’ interiors, upgrade the fitness center and improve landscaping and walkways.
This is Gaia’s eighth deal this year, with a total of $215 million in property acquisitions by the firm in the last 12 months. HFF represented the seller in the transaction.
"We believe in the U.S. multifamily market and in its stability and underlying opportunities, especially now that there has been a significant decrease in the rate of homeownership. Regency Club Apartments further diversifies our portfolio, ensuring a steady, low-risk cash flow,” Gadi Ben Haim, head of real estate for Israel-based Harel, said in a statement.
Multifamily remains appealing because there will a distinct lack of supply for at least the next three years, Scioscia says. And PRG is looking forward to future deals with Gaia and Harel.
“You have this shift from home ownership to renting,” he says. “And repeating with partners is something we always try to do.”
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