A development site at 921-931 Madison St. in Hoboken is fully approved for 36 luxury apartments and 10,050 square feet of ground-floor commercial space. — Rendering courtesy: CBRE
By Joshua Burd
A private investor has acquired a multifamily development site in Hoboken, marking the first trade involving the portfolio of the disgraced firm National Realty Investment Advisors LLC.
Brokers with CBRE arranged the transaction at 921-931 Madison St., which is fully approved for 36 luxury apartments, working on behalf of a court-appointed restructuring team with AIRN Management. They noted that the property, previously home to Water Music Studios, traded for $8.5 million and is part of a roughly 450-unit, seven-property portfolio along the New Jersey Gold Coast that the team is now marketing for sale.
The deal comes roughly a year after the Securities and Exchange Commission charged Secaucus-based National Realty Investment Advisors and four of its former executives with running a Ponzi-like scheme that raised roughly $600 million from about 2,000 investors. Just a few months earlier, the firm filed for Chapter 11 bankruptcy protection, leading to what is now a liquidation of its portfolio of buildings and development sites.
“We are pleased to close on the first of several transactions on behalf of AIRN Management,” CBRE’s Fahri Ozturk said. “921-931 Madison Street’s ideal location in Hoboken, one of New Jersey’s top residential markets, helped draw significant interest from the development community and allowed us to create a competitive bidding environment for the asset.”
Ozturk, Richard Gatto, Zach McHale and Jeff Babikian represented the seller and procured the buyer, a private developer based in Hudson County. They noted that the buyer is moving ahead with the approved project, which will also include 10,050 square feet of ground-floor commercial space and is steps from NJ Transit’s Ninth Street light rail station, providing direct access to Hoboken Terminal.
It’s also adjacent to the Hoboken ShopRite and within walking distance of Trader Joe’s, CVS, Starbucks, Shake Shack, Chipotle, Carlo’s Bakery, Nike, lululemon and other major retailers.
“Despite the high cost of debt in today’s market, development sites in prime locations remain in strong demand and can act as a bridge to a better economic environment,” Gatto said. We were confident from the onset that our process, coupled with this amazing site, would allow us to secure maximum pricing for our client.”
Last year’s complaint by the SEC alleged that, beginning in 2018, NRIA and its executives raised funds by promising investors their money would be used to buy and develop real estate properties, which would generate profits through a fund that it set up to invest in the projects. The four charged executives, Rey E. Grabato II, Daniel Coley O’Brien, Thomas Nicholas Salzano and Arthur S. Scutaro, allegedly solicited investors in a nationwide campaign promising returns of up to 20 percent, but instead used the money to pay distributions to other investors, to fund an executive’s family’s personal and luxury purchases and to pay reputation management firms to thwart investors’ due diligence of the executives.
“We are very happy to get the first transaction of the portfolio over the finish line with CBRE,” said Rick Budd, CEO of AIRN Management. “Our management team and CBRE worked in lockstep to navigate both economic headwinds and a corporate restructuring throughout this transaction. CBRE team’s local knowledge, experience, and marketing process guided us to make the right decision for our investors.”