Lexington and Jefferson Apartments at 21 Oak Terrace in Somerville — Courtesy: Berkadia
By Joshua Burd
The family owners of a combined 156 apartments in Somerville and New Brunswick have sold the portfolio in separate transactions, brokers with Berkadia announced.
According to the listing team, the deals mark the first sale of either property since their construction more than 60 years ago. They include The Lexington and Jefferson Apartments, a 118-unit complex at 21 Oak Terrace in Somerville, and the 38-unit Century Apartments at 85 Easton Ave. in New Brunswick.
Berkadia Senior Managing Director Nat Gambuzza and Senior Director Trevor Fiebel of the firm’s Morristown office represented the seller, the family of the original developer, and procured both New Jersey-based buyers. The firm’s Josh Lipsey and Charles Rigoglioso, senior directors, handled the financing for Lexington and Jefferson Apartments.
“These multigenerational family assets are highly coveted by the investor community, consistently generating an overwhelming amount of interest,” Fiebel said. “However, they typically come with a significant amount of tax exposure for the seller. We identified the family’s concerns and worked closely with them in preparation for the sale of their entire portfolio, while also providing solutions for them to exit in a tax-efficient manner through 1031 exchanges.”
In a news release, Berkadia noted that The Lexington and Jefferson Apartments provides easy access to downtown Somerville’s vibrant dining and nightlife along with multiple major employers and public transportation. The property was built in the 1960s and includes 64 garden-style rentals with individual garages and an elevator-served, midrise building with 54 units, with an overall mix of floorplans ranging from one- to three-bedroom homes.
Century Apartments, for its part, is in the heart of New Brunswick and provides residents with easy access to Rutgers University, employment opportunities, commuter rails, parks and shopping centers, the news release said. The elevator-served building was built in 1969.
The buildings traded at capitalization rates of 5 and 4.9 percent, respectively.
“Efficiency and timing are paramount when coordinating these types of exchanges,” Gambuzza said. “We were tasked with creating a market for two separate sales, satisfying contingencies as quickly as possible, and timing the closings in proximity to each other so that proceeds could be allocated to multiple upleg opportunities.”
