Solomon Purchases Two Rental Properties with Much in Common
- May 02, 2012
Lancaster, Pa.—Solomon Organization recently purchased two luxury rental communities, one in Lancaster, Pa., and the other in Pleasant Valley, N.Y., and will immediately begin to upgrade the communities’ apartments, landscaping and common areas.
Hershey Heritage Village in Lancaster, Pa. is a 517-unit community with one- to three-bedroom apartments and townhomes that will be renamed Kensington Club. Village Park in Pleasant Valley, NY is a 178-unit property with large one-bedroom apartments as well as two-bedroom townhomes with screened-in porches. Kensington Club was built in two phases, in the mid-1970s and mid-’80s, while Village Park was constructed in the mid-1980s.
Though the two properties are different in many ways, they also have much in common. “Both have similar qualities,” Summit, NJ-based Solomon Organization’s managing director Marshall Rosen tells MHN.
“Both are communities that are in locations we like very much, and in which we already have a significant presence. In Lancaster, we have five other properties, and near Pleasant Valley we have four other properties in the Hudson Valley.”
Both properties are located in areas with diverse economies and excellent access to main highways, Rosen adds. And until the acquisition both had still been owned by their original builders, who had continued to very carefully maintain the properties. “They were very well run, very clean, and there’s been a lot of capital improvement money put back into the properties,” he says.
What hadn’t been done under prior ownership will now be tackled by Solomon. “We will put in new kitchens and bathrooms, and improve and expand generous amenities packages, particularly in the Kensington Club location,” Rosen says.
As Solomon upgrades the properties, there will be opportunities to increase rents, but still be highly price competitive vis-à-vis newer properties. “We can rent these renovated apartments for less than new-construction apartments,” Rosen says. “And because they are very large, residents get more space.”
On average, the units are 30 percent larger at both properties than competitive properties built within the last seven years, he adds.
Both transactions took place as off-market deals. Solomon Organization’s long-time relationships within the industry, as well as its reputation for keeping its word, enabled it to gain the opportunity to acquire these assets, Rosen says. The challenge was performing the due diligence on the two properties while other acquisitions were being finalized in Lancaster, the Hudson Valley and Connecticut. “That puts a lot of stress and strain on an organization,” he says.
Solomon Organization expects community-wide renovations like window upgrades and common area enhancements to be complete within a year at the properties. Upgrades to kitchens and bathrooms within the units themselves will be undertaken over a three-year period.
“We’ve been doing a lot of these acquisitions in the past three years, and one thing we’re proud of is that when we do upgrades to properties, we hire people,” Rosen says, adding Solomon Organization has hired a dozen new employees in connection with the new acquisitions.
“Small businesses are the engine of job growth, and we’re thrilled when we can add jobs.”