69-75 Sparta Ave. in Newton — Courtesy: The Kislak Co. Inc.
By Joshua Burd
An investor has purchased a 101-unit, loft-style apartment building in Newton for nearly $23 million, in a newly announced transaction by The Kislak Co. Inc.
According to the brokerage firm, the property at 69-75 Sparta Ave. is a historic shoe factory that was converted into a collection of studio, one-bedroom and two-bedroom homes known as the Merriam Gateway Apartments. The structure also houses 10,000 square feet of commercial space, boasting a location one mile from downtown Newton and 60 miles from New York City.
Kislak Senior Vice President Joseph Keenan represented the seller, Merriam Gateway Apartments Inc., in the $22.58 million deal. Justin Lupo, also a senior vice president with the firm, procured the buyer, The Cobblers Loft LLC, an affiliate of Blue Diamond Equities LLC.
“The offering garnered a tremendous amount of interest from investors since it is rare that a 100-plus-unit property under an hour from New York City not subject to rent control becomes available,” Keenan said. “This was a true value-add opportunity as the rents are on average 25 percent below market in an ideal location.”
He added that the property sits across from the world headquarters of and adjacent to the soon-to-be-expanded campus of Thorlabs Inc., which is adding some 4,000 new employees to the area.
“The purchaser was quick to capitalize on these benefits and in the midst of the pandemic, a deal was made,” Keenan said.
The property, which has been renamed The Cobbler Lofts, was 95 percent occupied at the time of the trade.
“This sale is an excellent example of the strong investor demand for income-producing properties in northwestern New Jersey,” Lupo said. “While cap rate compression continues across the state, the opportunity to acquire larger assets in more tertiary markets is becoming increasingly attractive. The purchaser will benefit greatly from the changing rental landscape in Newton given the Thorlabs campus and the thousands of new jobs it is attracting.”
Joanne Sarubbi of Bourne, Noll & Kenyon and Neil Fink of Fink & Zelmanovitz PC served as attorneys for the seller and buyer, respectively, according to a news release. Walker & Dunlop sourced acquisition financing through Nate Hyman of Polaris Funding.
“As with most deals, there were several issues that had to be resolved prior to closing, which would not have occurred without the team effort and collaboration among all parties involved — the seller, purchaser, bankers, attorneys and brokers,” Keenan said.