River Park Apartments, Raritan, NJ River Park Apartments, Raritan, NJ

RARITAN, NJ–River Park, a 224-unit apartment community in Somerset County’s borough of Raritan, is now part of Castle Lanterra Properties’ multifamily portfolio. The $56 million transaction marks CLP’s second New Jersey acquisition in the past five months, following the addition of Harbor Pointe, a 544-unit, class A waterfront property Castle Lanterra bought for $147.5 million last October.

River Park was previously owned by a global insurance group. Cushman & Wakefield’s Metropolitan Area Capital Markets Group represented the seller and procured CLP as buyer.

“Having personally invested in a substantial number of apartment communities in New Jersey over the past 18 years, I knew the $250,000 per unit valuation at which we were able to acquire this immaculate property was a solid entry point,” says Elie Rieder, CLP’s founder and CEO. “Historical sales of other competitive properties within this submarket have seen prices in the $275,000-285,000 range.”

Constructed in 2007, River Park “was built to condominium specifications,” says Benjamin Loney, head of acquisitions for CLP. “Very high quality materials were used during construction. Due to the financial crisis, the decision was made to turn River Park into a rental property.” River Park’s amenities include an underground parking garage, a heated pool, fitness center, tennis courts, club room, business center with conference room, recreational facilities, and onsite concierge.

“Currently, this property trails its competitive set in both occupancy and rent, even though no other properties in this submarket can offer the same level of amenities found at River Park,” says James Brady, vice president of operations. “We believe there is an immediate opportunity to increase occupancy and rent to levels that are consistent within the marketplace, even before we commence our unit renovation program. We also intend on making improvements to the common areas, which will help to elevate the tenant experience.”

River Park is just a 10-minute walk from Raritan’s New Jersey Transit rail station, which provides access to Newark and Manhattan’s Penn Station. Somerset County is driven by a very strong employment base that includes 16 million square feet of occupied office space, all within a 15-minute drive. This includes corporate campuses for many of the world’s largest companies; including several Johnson & Johnson divisions, Janssen Pharmaceuticals, Goldman Sachs, ING, Citigroup, AT&T, Merck, Oracle, Pfizer, Bayer, Philips and others.

“While the millennial generation is a frequent target for owners of residential communities, our demographic for this location are the 35 to 50 year-olds,” says Rieder. “They are highly skilled, educated, and very well compensated. It was no surprise to learn that the average household income at River Park is $119,000.”

According to Cushman & Wakefield’s Brian Whitmer, who spearheaded the River Park sale, the multifamily sector is seeing strong investment demand overall.

“Multifamily is benefitting from the demographic shifts in favor of apartment living – people in search of a more urban lifestyle and a waning desire to own,” he says. “Regional market fundamentals have remained strong and still point towards stability and positive rent growth. These are the reasons Northern New Jersey is on everyone’s radar. Active investors like CLP are targeting properties along the Hudson Gold Coast and west, following the train lines as they seek opportunities to either develop or buy existing communities in the towns serviced by rail.”