ABR, TreeTop Buy 293-Unit Apartment

NEWARK-Alex. Brown Realty Inc. and TreeTop Development have teamed up to buy Parkwood Place, a 293-unit apartment complex on Second Avenue East in this city's North Ward section. The sale price was not disclosed, and the seller was described by an ABR spokesman only as "a private investor."

To complete the deal, ABR Chesapeake Fund III, a value-added fund sponsored by the Baltimore-based ABR, provided an equity commitment of $6.1 million. Joel Mazur and Scott Assouline of Meridian Capital Group's New York office arranged the debt and equity capital for the transaction. New co-owner TreeTop is also based in New York.

For ABR, the investment is its first in New Jersey's largest city. "Newark is a viable, growing market," says Tom Burton, the firm's VP and CIO. "The city has seen a substantial amount of private and public investment in recent years--the new Prudential Center arena is a great example--and that trend looks to continue.

"We see a market poised to benefit from the growth in Manhattan and other New York metropolitan area communities," Burton says. "Rising housing costs in these communities have pushed more residential into Newark and the surrounding areas."

Parkwood Place, which consists of seven, six-story elevator-served buildings, was constructed in the late 1940s. At the time of closing, the property had a vacancy rate of less than 4%, and the surrounding submarket currently has a vacancy in the neighborhood of 5%.

And the new owners have a $1.4-million capital improvement plan in the works for the property. That plan focuses on renovating the individual units as tenancy rolls over, upgrading the common areas and completing some exterior improvements.

"It is a solid investment that should generate strong returns to our investors," says ABR president and CEO John Prugh. "We have strong existing cash flow, attractive debt financing in place and the benefit of working with a local JV partner that has extensive experience in core urban residential assets."