Real Estate Companies Expand Apartment Community Portfolio

August 02, 2011 / Russell Legato, Residential Property Analyst

Phoenix Realty Group (PRG) and The Orbach Group have purchased 472 apartments in three properties at the central New Jersey towns of Neptune, South River and Long Branch.

Real Estate Companies Expand Apartment Community Portfolio

The $46.5 million purchase from AIG formed part of a larger transaction involving three additional New Jersey apartment communities sold to Vantage Properties and Angelo, Gordon & Company. All the deals closed simultaneously, with PRG and Orbach acquiring the apartment community subject to the existing long-term financing on two of the three properties.

In mid-July, the PRG acquired the $23-million Pine Club Apartments in Pomona, California, a 220-unit apartment community that offers full amenities including pool, spa, tennis courts, fitness center and picnic areas. The community serves employees from several hospitals and various industrial firms in the region, as well as employees and students from Cal Poly Pomona.

On the other hand, Meyer Orbach, president of The Orbach Group, said the portfolio is a great fit for the firm’s holdings.

“The properties are of great intrinsic value, which is our first priority in deciding upon an acquisition,” said Orbach.

“Geographically, they complement our existing portfolio of 4,000 units across New Jersey, New York and Pennsylvania. We know from our past experience that PRG and Orbach work well together in these types of ventures, and our tenants and both firms will benefit from the transaction.”

“These value-added assets are a perfect match for our targeted real estate investment funds that in the past two years have acquired nearly 1,500 rental units in New Jersey valued at more than $130 million,” said Edward Ratinoff, PRG managing director.

“The region continues to show a strong demand for middle-market apartments that offer an attractive lifestyle at a time when home prices remain out of reach for the majority of local working families, especially those who commute to jobs in Manhattan and North Jersey,” added Udi Kore, PRG vice president.

“Orbach has proved to be an excellent operator in this space, and we are very pleased to be collaborating with them again.”

The New Jersey portfolio cosists of Jumping Brook Apartments in Neptune (308 units in 28 buildings), Leonardine Gardens in South River (140 units in eight buildings) and the fully occupied Marine Gardens on the oceanfront in Long Branch (24 units in two buildings). Nearly $2.5 million will be spent across all three properties to enhance amenities and landscaping and renovate units.

Earlier this year, PRG teamed with Orbach on a 13-building residential portfolio located on West 49th Street in Manhattan, just blocks from Times Square and Rockefeller Center.

In the first quarter of 2011, Orbach acquired a nearly 200-unit rental property in Bensalem, Pa. Known for its hands-on approach to managing properties, Orbach continues to seek new multifamily investment opportunities in New York City, New Jersey and Pennsylvania. Orbach Group already owns over 4,000 apartment units in these areas.

PRG has tapped $380 million in discretionary institutional fund capital to invest in value-added multifamily properties and to pursue joint-venture development of new multifamily properties in the tri-state region of New York, New Jersey and Connecticut, and across Southern California.

Since mid-2010, the real estate company has acquired more than 3,500 apartment units nationally, valued at $400 million. The firm currently owns and manages market-rate apartment communities and affordable housing in major markets across the U.S.

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