Does $124M Connecticut Trade Point to More Big Deals in NYC Area?
- Aug 08, 2008
After a slow spring and early summer, a major apartment acquisition near New Haven, Conn., could be a signal that the greater New York City region’s deal pipeline could start to flow more freely before long. “We’re seeing some signs of people doing major deals,” Jeffrey Dunne, vice chairman for CB Richard Ellis Inc.’s investment properties unit, told CPN. Dunne made the observation in light of the $124 million trade of a 764-unit apartment community (pictured) in Hamden, Conn., recently arranged by his team, which also included Patrick Bisceglia and Todd Newman in collaboration with Baltimore-based William Roohan. Elsewhere in the tri-state region, Dunne’s team has two more major trades under contract in New Jersey–a $400 million office park and a $100 million power center. Although April, May and June turned out to be sluggish months for investment sales in the region surrounding New York City, Dunne speculated that these recent deals are contributing to establishing a pricing framework after a long period of uncertainty. That, in turn, could give prospective buyers and sellers more confidence about asset values, he explained. As a case in point, the recently closed Hamden apartment property fetched among the highest prices, if not the highest, for a transaction in Connecticut this year. The property’s 1990s vintage, amenities and recent $10.3 million upgrade rank it as New Haven County’s premiere apartment complex, Dunne said. The purchase also represents a new market for the buyer, Baker Properties L.P., an affiliate of Pleasantville, N.Y.-based Baker Cos., which has tended to focus on industrial properties. Apartment properties are also attractive to buyers and lenders because the soft single-family housing market is helping keep apartments well-leased on the whole. And despite the much-discussed troubles of Fannie Mae and Freddie Mac, the two government-sponsored entities are still lending on multi-family properties. All these factors contributed to the favorable financing terms made available to Baker Properties. In collaboration with CB Capital Markets’ Maury Zanoff and Mike Sherman, Dunne’s team secured a $95 million loan from Fannie Mae at a fixed rate for 10 years. Terms also include several years of interest-only payments.