HFF Closes $86.5M Sale to Avalon Bay, Arranges Financing

HFF arranged acquisition financing for an $86.5 million sale; Sterling closed on a student housing community; and Waterton bought both a construction note and mezzanine loan.

Fox Run Apartments

Plainsboro, N.J.–The New Jersey and New York offices of HFF (Holliday Fenoglio Fowler LP) brokered and arranged acquisition financing for the sale of Fox Run Apartments, a 776-unit multi-housing complex in Plainsboro, N.J. Avalon Bay Communities purchased Fox Run Apartments for $86.5 million or $111,000 per unit and assumed existing financing on the property.

The HFF investment sales team, led by Senior Managing Directors Jose Cruz and Andrew Scandalios and Directors Jeffrey Julien and Kevin O’Hearn, marketed the property on behalf of the sellers, Angelo Gordon & Company and Vantage Properties, who have owned the property since July 2009.

In addition, HFF’s Cruz and director John Taylor worked on behalf of the buyer/borrower, Avalon Bay Communities, to secure a $10 million, fixed-rate securitized acquisition loan through PNC Real Estate.

Fox Run Apartments is located at 60 Fox Run close to Route 1, Carnegie Center, Princeton Forrestal Village and the University Medical Center at Princeton, which is due to open in 2011. The property is situated on more than 46 acres and has 58 two-story buildings with one- and two-bedroom units averaging 713 square feet each. Community amenities include a clubhouse, fitness center, outdoor swimming pool, community room, jogging trail, picnic area with barbeque pits and 11 laundry rooms.

“Fox Run Apartments benefits from a premier location within the prestigious Princeton submarket; in between New York City and Philadelphia,” says Cruz. “This submarket has a proven track record of high occupancy and has high barriers to entry for new construction.”

Angelo, Gordon & Co. is a privately-held registered investment advisor dedicated to alternative investing. The firm was founded in 1988 and currently manages approximately $23 billion.

Founded in 2005, Vantage Properties invests in New York residential and retail properties.

Texas buyer closes on student housing property near University of Michigan

Ann Arbor, Mich.–Sterling University Housing, a division of The Dinerstein Companies, closed today on 4Eleven Lofts, a 96-unit, 342-bed student housing community near the University of Michigan. The property, which was in escrow for two months, was 100 percent occupied at closing. Holiday Fenoglio Fowler represented the parties in the transaction. The property was purchased for an undisclosed amount.

Built in 2009, 4Eleven Lofts is a 10-story high-rise community complete with modern kitchens, flat panel HDTV, single or shared bedrooms and 10-foot ceilings. Rebranded Sterling 4Eleven Lofts, the property is located two blocks from Central Campus in the heart of Ann Arbor.

Waterton Residential lands first loan acquisition in New York City

New York–Waterton Residential bought both the construction note and mezzanine loan for The Addison, a 271-unit Class-A apartment project in downtown Brooklyn. The property is 98 percent complete with an anticipated starting resident occupancy in March 2011.

Originally developed by NorthEnd Equities, a commercial real estate firm based in New York City, the project was financed with a $110 million construction loan from iStar Financial and an approximately $24.5 million mezzanine loan from Archstone.

“The Addison represents Waterton’s first loan acquisition in New York City, a market that has extremely high barriers to entry,” says Max Peek, Waterton Residential’s Vice President of Acquisitions. “Given the favorable supply/demand trends in the market, we are very bullish on the New York City metro area. Waterton is actively focused on finding new opportunities in New York, including additional loan purchases, recapitalization situations, and fee simple acquisitions.”

The project consists of two attached buildings. The 221 Schermerhorn Street building is a 15-story structure containing 82 units with a mix of 40 studios, 14 one-bedroom units and 28 two-bedroom units. The 230 Livingston Street building is a 26-story structure containing 189 units with a mix of 25 studios, 64 one-bedroom units, 39 one-bedroom with home office units and 61 two-bedroom units.

With a 109-car underground parking garage, The Addison also features an event room for private resident use, a fitness center, an outdoor community deck, resident storage units, a lounge/recreation room and an entrance to the subway from within the building.

In addition, The Addison has two retail units including a 5,394-square-foot space fronting on Livingston Street and a 1,453-square-foot space on Schermerhorn Street.

New York apartment broker Citi Habitats will handle the lease-up to stabilization of The Addison which will be managed by developer affiliated Northbroad Management LLC. Closing the transaction November 24, 2010, Waterton placed bridge financing on the property through a loan with Wells Fargo and plans to seek permanent financing once stabilization is complete.