111 South Harrison St. in East Orange — Courtesy: Gebroe-Hammer Associates
By Joshua Burd
An apartment owner has sold a 10-building, 641-unit portfolio in East Orange for $113 million, in a newly announced transaction by Gebroe-Hammer Associates.
According to the brokerage team, the sale by Milrose comprises a series of workforce housing assets on or near South Harrison Street. The buyer, Spaxel, is a Manhattan-based developer and investment firm that is marking its largest acquisition in New Jersey to date.
Gebroe-Hammer Executive Managing Director Joseph Brecher spearheaded the transaction on behalf of both parties, working with Executive Managing Director David Oropeza and Executive Vice President Niko Nicolaou. Brecher noted that the complex sale required a two-tranche closing structure that allowed for loan assumptions on three of the 10 properties by the buyer.
“While we tapped into our expertise to facilitate the existing loan assumptions — a process that required coordination with three separate servicers — we were able to successfully execute a two-phase closing just one month apart,” he said.
The portfolio features a mix of one-, two-, three-and four-bedroom layouts across the 10 properties, which include 106, 111, 120, 158, 179, 255, 275, 296 and 94 South Harrison St., along with 650 Park Ave. The largest among them is 106 South Harrison, with 119 homes.
“Each of these properties benefits from East Orange’s greatest asset — its transit connectivity,” Brecher said. “They all are a short walk to Brick Church Station, which offers Midtown-Manhattan Direct service along the Morris & Essex Line, and have front-door NJ Transit service along five routes. Of course, highway access ramps to the Garden State Parkway, (Interstate 280) and secondary roadways round out the transportation choices for local residents.”
In announcing the deal, Gebroe-Hammer noted that East Orange has more than $1 billion worth of development activity underway, which is helping to diversify the city’s existing tenant pool while making existing apartment buildings ripe for repositioning.
“Collectively, the properties possess inherent value-add characteristics and a percentage of units that have been upgraded during the past four years or so,” said Oropeza, the firm’s East Orange and eastern Essex County market specialist. “As a result, the properties are primed for continuation of in-place enhancements under new ownership and further repositioning maturation.”