KANSAS CITY, KS—Treetop Development owns a lot of value-add, market-rate units in New York City, but through its affiliate The Aspen Cos., it also looks to balance that lucrative business with the security provided by the ownership of HUD units. Aspen has been an active buyer in the past year, and started off 2016 by announcing a pair of significant purchases. It acquired two elderly-designated multifamily project-based Section 8 properties located in Kansas City, KS' Riverview neighborhood and Bonner Springs, KS, respectively. The two high-rise buildings, Sunrise Tower at 15 N. 10thSt. and Nettleton Manor at 111 E. Kump Ave., include a combined total of 271 apartments subsidized under housing assistance payment contracts provided by HUD. The combined sale price was $10.275 million, and there were two separate sellers. Nettleton Manor was sold by a Washington-based group, GP Nettleton LLC, and Sunrise Tower was sold by GHC Housing Partners. Aspen and Treetop officials say the acquisitions represent opportunities to generate a steady and predictable cash flow due to the properties' Section 8 designation and the typically low-rate of turnover among the seniors, as well as the lower maintenance and repair costs that usually characterize senior-designated public housing communities. "Aspen owns 7,500 HUD units nationwide, and we're consistently growing Aspen's HUD portfolio,” Adam Mermelstein, principal of Treetop Development and Aspen, tells GlobeSt.com. "We employ this strategy through Aspen, along with our value-add, market-rate multifamily acquisitions in New York City, which are handled through Treetop. While our New York City market-rate multifamily transactions provide tremendous growth opportunities both in value of the asset and through rent growth, our HUD strategy provides strong cash flow on an annual basis, with the security of long-term HUD contracts with the federal government." Aspen's $400-million portfolio now includes 60 communities nationwide, all of which are HUD-subsidized. Other purchases by the company in 2015 include: - The $13.3-million acquisition of 104-119 W. 144th Street in New York's Harlem section
- The $22.1-million acquisition of four rental complexes in AL, OH and TX
- The $15.5-million acquisition of six properties located throughout SC and GA
- The $11.25-million acquisition of two Raleigh, NC apartment complexes
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