The Addison at Princeton Meadows
By Joshua Burd
A joint venture has acquired a 439-unit garden apartment property in Plainsboro for more than $73 million, with plans to modernize the complex as part of a repositioning effort.
The partnership, made up of Kushner Real Estate Group and Goldman Sachs Asset Management Private Real Estate, acquired The Addison at Princeton Meadows from Harbor Group International LLC. The property on Pheasant Hollow Drive is about 15 minutes from downtown Princeton and features a mix of one- and two-bedroom apartments.
HFF represented Harbor Group, while Gebroe-Hammer Associates arranged the sale on behalf of the seller and procured the buyer in the $73.25 million transaction.
The 94 percent occupied complex is also just minutes from Deer Creek, a 288-unit rental community in Plainsboro acquired by KRE Group and Oxford Realty Group in February 2016. The firms, which are based in Bridgewater and Highland Park, respectively, also partnered with Verde Capital in the $45 million acquisition.
“KRE’s collaboration with GSAM Private Real Estate will enable us to reposition Addison at Princeton Meadows and realize the property’s full potential,” said Jonathan Kushner, president of KRE Group. “We’ve had considerable success acquiring similar properties, modernizing the units and amenities, and reintroducing them to the marketplace.
“We believe this acquisition represents another exceptional opportunity to deploy capital wisely.”
The sale of The Addison at Princeton Meadows was the second time the property has changed hands in three years. HFF brokered the sale of the property to Harbor Group, a Norfolk, Virginia-based real estate investment and management firm, in the earlier transaction.
The HFF investment sales team involved in the deal was led by Senior Managing Director Jose Cruz, Managing Director Kevin O’Hearn and directors Michael Oliver and Steve Simonelli. Joseph Brecher, managing director with Gebroe-Hammer, arranged the sale on behalf of the seller and procured the buyer for the Livingston-based multifamily brokerage firm.
“The demand for core plus multifamily in the state of New Jersey remains very high and investors are continuing to underwrite renovation premiums,” Cruz said.
The property is minutes from both Route 1 and the Princeton Junction train station and adjacent to the Meadows at Middlesex, an 18-hole public golf course. Community amenities include a fitness center, outdoor adult and children’s pools and basketball and tennis courts.
“Middlesex County has become one of the state’s newest high-barrier-to-entry investment markets for apartment buildings in just the past two years or so,” said Brecher, who also represented KRE and Oxford in their acquisition last year. “As one of the highest-income counties in the United States and home to a high concentration of education, healthcare/pharmaceutical and Fortune 500 top employers, the region is favored by a highly educated tenant base of local and out-commuters to New York City.”
GSAM Private Real Estate and KRE said they will invest in the property’s amenities and substantially renovate unit interiors.
“We find this investment compelling due to its location within a high barrier-to-entry market, its access to high-quality public education and the opportunity to create value through a strategic capital program,” said Joe Gorin, managing director with GSAM Private Real Estate.
For KRE Group, the deal also marks the fourth garden apartment community acquisition within northern and central New Jersey in the past 20 months. The firm has invested nearly $300 million in that time and acquired more than 1,500 rental units as part of a strategic initiative to grow the company’s portfolio of multifamily properties with value creation potential.
“At the heart of each of these deals was the opportunity to enhance the profitability of the newly acquired property through capital improvements,” said Darin Raiken, director of acquisitions for KRE Group.