Henderson Enters NYC with Upper Manhattan M-F Portfolio Buy

Henderson Global Investors has made its first acquisition in New York City with the purchase of 177 units in three buildings on W. 107th Street on Manhattan’s Upper West Side as part of its CASA IV Fund. The six-story buildings with a total of 135,800 square feet at 210, 220 and 230 W. 107th St. sold for $60 million, according to a March 18 CPN report. Millbrook Properties was the seller. Henderson, an independent investment manager with more than $117 billion under management, said today the acquisition was a joint venture investment made with The Dermot Co., a New York City-based developer and multi-family owner-operator. This is Henderson’s first JV with Dermot . Dermot is also partnering with Grosvenor Investment Management U.S. Inc. on a high-rise rental apartment building that will be developed at 29 Flatbush Ave. in Downtown Brooklyn. Other Dermot projects in New York City include converting the Williamsburg Savings Bank Building into luxury condos called One Hanson Place and turning the Queens Family Courthouse in Jamaica, Queens, into multi-family housing, retail and parking. The W. 107th Street properties (pictured), located between Amsterdam Avenue and Broadway, were described as a value-add investment opportunity that “also includes a development component and a significant unit rehabilitation program.” The previous owner had invested over $1 million in improvements. The apartments are currently rented with approximately 92 percent occupancy, according to Henderson. Susan Motowidlak, portfolio manager for the CASA IV Fund, told CPN today that most of Millbrook’s renovations involved the common areas. She said Henderson and Dermot plan to upgrade all the apartments with new counters and cabinets in the kitchens and bathrooms and add new wood flooring to the units. Renovations are expected to start immediately and be completed as soon as possible, she said. The apartments are currently rented with about 92 percent occupancy. Motowidlak also noted that the acquisition includes air rights and that more top-floor or penthouse units could be added to the buildings. CASA IV, the fourth in Henderson’s value-add U.S. multi-housing funds, has raised $205 million in equity from institutional investors, including four public funds and one corporate pension plan. The fund now has seven assets and Henderson expects to invest the remaining capital this year. “The CASA Fund Series has a proven track record investing in the multi-family housing sector and the addition of this property helps broaden the geographic focus and property diversification that we can bring to our investors,” Motowidlak said in today’s release. The properties in the CASA IV Fund are all rental apartment communities and were purchased between December 2006 and this month. The other assets are: The Burlington in Minneapolis; The Mansion in Kansas City; Glenlake Club in Chicago; Vista Pointe in Los Angeles; Columbia Commons in Baltimore; and Royale Sherman in Los Angeles. Most of the multi-famliy units acquired in the CASA funds have been suburban, garden-style apartments, Motowidlak said. Other than the W. 107th Street properties, the funds have only made urban apartment purchases in the Washington, D.C., market, she added. If another urban asset was presented to the fund, Motowidlak said they would look at it. “We try to diversify and not be overexposed in any one area,” she noted.