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CHERRY HILL, NJ-Earlier this week, Hirschfeld Properties broke ground on a state-of-art clubhouse at The Grand, a 544-unit apartment complex here. The groundbreaking was another step in a $27-million renovation project at the landmark complex.

In April of last year, Herschfeld Properties, in partnership with Dubai Investment Group Real Estate, purchased the Landmark Apartments for $100 million. The seller was NJ Cherry Hill LLC.

While Hirschfeld Properties–which has offices in West Hartford, CT and New York City–has developed retail properties in New Jersey previously, this is the first time it has acquired a multifamily property in the Garden State, says company president Jeffrey Hirschfeld. He says the firm was attracted to the property because of is location and its sizable vacancy. “It was 40% vacant, so there is real upside to lease up that vacancy, as well as work with the overall economics as the result of the improvements we are making,” he says. “The demographics in Southern Jersey are very favorable for us in terms of income and education levels and density of population. The proximity to Philadelphia was attractive to us as well, and there is a big employment base in South Jersey of pharmaceutical companies and other major corporate employers.”

In addition to the clubhouse and new pool, the owners are upgrading the individual units, which include studios, one, two and three-bedroom apartments, replacing the elevators and installing a new HVAC system. Rents in the property range from $900 to $1,200 a month. Herschfeld says the company hopes to raise rents, but wasn’t sure by how much. “Cherry Hill has a local rent control board, so we have to go through them,” he explains. “But we certainly hope to raise them given the magnitude of the investment we are making.”

The renovation program will take about 14 months to complete, Herschfeld says. Work will continue while residents are living in their units. “When it’s done it’s going to be a very unique property, because the units are larger than anything else in the market,” Herschfeld says. “Due to the economics of construction today, no developer would ever be able to build units of this size and generate any type of return based on what the market rents are.”

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