PGIM, in a joint venture partnership with Fetner Properties, has closed on a $73.5 million purchase of a Bronx residential community, The Arbor.
The global investment arm of Prudential Financial acquired the property through its PGIM Real Estate Fund, Inc., which continues to make offensive plays. Also, the deal was made through a sale-leaseback with Morningside Heights non-profit college Columbia University.
The building at 3260 Henry Hudson Parkway in Riverdale houses students, faculty and staff who qualify for Columbia Residential, the school's department that manages housing for more than 8,000 members.
Currently, The Arbor is undergoing renovation, with PGIM expecting the 127-unit apartment to be re-leased in two phases starting this July. The property will continue to operate for residential use.
Moreover, Darin Bright, senior portfolio manager for PGIM, noted that The Abor has "very strong near-term growth potential."
So far, the fund has deployed $260 million in capital across more than $630 million in property values. The Arbor buy marks the investment pool's 10th purchase.
The fund recently transformed into an interval structure from a tender offer. This means it will remain taxed as a REIT but will offer its shareholders more "predictable liquidity" through repurchase offers.
"A sharp repricing in real estate and a slow, uneven recovery have set up a significant tailwind for the asset class," said Soultana Reigle, head of U.S. Equity for PGIM's Real Estate Investment Group, in a statement.
"Our real estate strategies invest in sectors tied to essential demand, including various housing formats and logistics, that persists through cycles regardless of the broader financial market backdrop. These stabilized real estate investments tend to generate resilient income with growth and lower volatility."
For the first quarter, Realtor reported that median rents across New York City surged by 6.2 percent year-over-year to $3,616. However, by borough, the Bronx saw the smallest increase, at 1.7 percent year-over-year.
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