The Highlands at Morris Plains at 40 East Hanover Ave. in Morris Plains — Courtesy: Sagard Real Estate
By Joshua Burd
Sagard Real Estate has acquired a 116-unit apartment property in Morris Plains, with plans to renovate more than three-quarters of the homes while updating amenities and common spaces.
The firm, formerly known as EverWest Real Estate Investors, paid an undisclosed price for what’s known as The Highlands at Morris Plains at 40 East Hanover Ave. Its value-add plan for the 22-year-old, workforce housing property will include upgrading 96 units and improving outdoor amenities, the firm said, leveraging its location just a half-mile from the Morris Plains train station and minutes from interstates 287 and 80 and Route 24.
CBRE’s Jeffrey Dunne, Stuart MacKenzie, Eric Apfel and Travis Langer represented the seller and procured the buyer.
“We are pleased to have represented the seller in the disposition of this unique asset,” said Dunne, a vice chairman with CBRE. “The asset’s location in Morris Plains, only five minutes from Morristown, coupled with the value-add potential, generated a huge response from the investor community.”
Sagard, meantime, said the deal marks the third investment for its recently launched moderate value-add, open-end fund, which targets seaport and last-mile industrial space, attainable rental housing serving the local workforce and other niche property subsectors in supply-constrained and high-growth markets.
“This fund is designed to capitalize on today’s market dislocation and shifting investor appetite, with a focus on workforce housing and last-mile logistics that are supported by structural demand drivers and limited new supply,” said John Maurer, head of equity at Sagard Real Estate. “Highlands at Morris Plains exemplifies the type of opportunity where we see potential to deliver strong risk-adjusted returns for our investors.”
In announcing the deal, Sagard noted that The Highlands at Morris Plains sits in an affluent northern New Jersey suburb with strong household demographics, proximity to transit and access to major employment hubs. The firm also pointed to the neighborhood’s top-ranked schools, quality retail and proximity to Morristown.
“The Morris County market has outperformed given the wealthier population, top public-school districts, and large concentration of employers, all within an hour of New York City,” MacKenzie said. “As such, Highlands at Morris Plains has performed exceptionally well with robust rent growth while maintaining high occupancy.”
The rental property, which sits on 5.4 acres, includes two wood-frame residential buildings, according to a news release. Amenities include a fitness center, a gazebo with grilling stations, open green space and both covered and surface parking.
“We’re excited to add Highlands at Morris Plains to our portfolio, aligning with our strategy of investing in well-located assets in established, high-demand submarkets,” said Tyler Williams, co-portfolio manager for the Sagard fund. “We’ve targeted Northern New Jersey for its appeal to the greater NYC workforce, particularly for young families. The property’s physical plant, location and amenities provide a solid foundation for long-term investment, while the original unit finishes offer an opportunity to upgrade interiors and enhance value near-term.”
