MOUNTAINSIDE, NJ-The Solomon Organization, based here, has closed on transactions totaling $250 million as part of Section 1031 exchanges. Solomon, which owns more than 10,000 residential units of various types in four states, sold three multifamily properties in New Jersey and Pennsylvania to unidentified buyers and bought a mixed-use portfolio in Upstate New York.

The series of transactions was negotiated over a seven-month period on behalf of Solomon by Thomas E. Cohn, a partner in the real estate practice group of the Roseland-based law firm of WolfBlock Brach Eichler. The 1031 transaction was accomplished in part as a forward exchange and in part as a reverse exchange, according to Cohn.

The acquisition part of the tax-deferred exchange encompasses 2,500 apartment units in a dozen complexes, one a mid-rise building, as well as two retail properties, a 412-unit mobile home park and vacant land in New York's Albany, Renssalaer, Troy and Saratoga counties. The seller was identified only as a group of related entities.

"The proceeds from the sales of the New Jersey and Pennsylvania apartment communities, coupled with a $155-million first mortgage and new capital from investors, were used to complete the purchase of the upstate portfolio," says WolfBlock's Cohn, speaking on behalf of Solomon. "Our client saw these undervalued properties in this part of New York State as an opportunity to gain a substantial foothold in a region that is undergoing great transformation, as well as investment in technology."

The various newly acquired properties are all located within an area where technology-based businesses are expanding. The focal point of that growth is a new research and technology center completed recently on the campus of the State University of New York at Albany.

"In addition, the transaction allowed our client to utilize tax-planning techniques, which deferred taxation on what would otherwise have been substantial sums subject to capital gains tax," says Cohn, who describes the combined deals as "one of the largest 1031 exchanges within the tri-state area in 2005, and one of the largest multifamily portfolio acquisitions.

"The opportunity to expand its base of operations contributed to the group's pursuit of the new properties," Cohn says. "Solomon plans substantial capital improvements to the properties, and has hired more than 80 people who worked in financial, supervisory, property management and maintenance positions for the previous owners."