UDR Inc., the third-largest publicly traded U.S. apartment owner, and MetLife Inc. bought a five- tower apartment complex on Manhattan’s Upper West Side for about $630 million.
UDR, based in Highlands Ranch, Colorado, is an equal partner with the biggest U.S. life insurer in the acquisition of Columbus Square, a development of more than 700 rental apartments between 97th and 100th streets, the real estate investment trust said today in a statement. The complex has a three-block stretch of retail space along Columbus Avenue that was not acquired by the partnership, according to the statement.
The deal is UDR’s fifth apartment purchase in Manhattan. The company planned to invest as much as $1.8 billion in Manhattan apartment buildings, Chief Executive Officer Tom Toomey said in an Aug. 9 interview. The REIT and New York-based MetLife combined Columbus Square with properties they previously acquired to form a new 50-50 joint venture consisting of 12 communities in five states totaling 2,528 apartments, UDR said in the statement.
“These properties are quite unique — three superblocks a block off Central Park,” Harry Alcock, a UDR senior vice president, said in a telephone interview. “The owners worked on this development for 15 years. It’s not something you could replicate easily in New York City.”
Pool, Boxing Center
Columbus Square was sold by a partnership of the Chetrit Group and Stellar Management, which developed the property and began leasing the first apartments in 2009, according to StreetEasy.com, a property-listings website. The sellers acquired most of the site in 2000 from Leona Helmsley for $122 million, according to a statement they released through a spokesman, John Marino.
The luxury apartment complex includes 2 acres (0.8 hectares) of landscaped gardens above street level, a saltwater pool, boxing center and parking garage, according to the property’s website.
Four of the five towers are a block west of Central Park, on Columbus Avenue from West 97th to West 100th streets. The fifth is on Amsterdam Avenue and 100th Street. Units in the buildings average 700 square feet (65 square meters), UDR said in the statement.
The purchase was financed through a combination of 10-year fixed- and floating-rate debt from Fannie Mae totaling $302.3 million, with an average interest rate of 3.8 percent, according to the statement. About 88 percent of the debt is fixed at 3.9 percent. The partners also assumed $363 million of loans on seven complexes owned by the previous UDR/MetLife joint venture.
UDR got a foothold in Manhattan last year when it agreed to buy 10 Hanover Square in the Financial District for $260.8 million. It later agreed to purchase the 507-unit Dwell95 in Lower Manhattan for $325 million. In July, the company said it would pay a combined $581 million for two rental communities, the 706-unit Rivergate complex in Murray Hill and a 210-unit community called 21 Chelsea.
Doug Harmon, senior managing director at New York-based Eastdil Secured LLC, was the broker for the Columbus Square deal.
The transaction “demonstrates yet again the value of New York City’s well-located luxury residential rental buildings,” Harmon said in an e-mail. “The NYC luxury residential market continues to demonstrate why it’s the most sought-after market in the country.”
The median effective rent for Manhattan apartments, or what tenants paid after landlord-sponsored incentives, rose 9.5 percent in the fourth quarter from a year earlier to $3,121 a month, appraiser Miller Samuel Inc. and broker Prudential Douglas Elliman Real Estate said in a report today.