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16A — April 24 - May 14, 2015 — Spring Preview — M id A tlantic
Real Estate Journal
By Elie Rieder, Castle Lanterra Properties A Q&A on Multi-Family aquisitions and the repositioning of Trantor Place Apartments M ulti -F amily A quisitions
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nvestors seeking high- yield value-add real es- tate opportunities con-
177-unit multi-family property in Staten Island, New York. CLP, led by founder and CEO, Elie Rieder , acquired the 16-building complex in 2011 for $11 million and sold the property for $17.9 mil- lion following a major capital improvement program. In the following interview, Rieder discusses this transaction, his company’s proven approach to acquiring undervalued assets, and strategies for implement- ing an effective recapitalization and repositioning effort. Q: Was there a lot of com- petition when you acquired
the rent roll was enhanced and the tenant base stabilized. The property also qualified for NYC J-51 Exemption and Abatement tax credits, further contributing to the value of the property. Q: Did you identify the property while it was still off-market? A: Yes. It was owned by a joint-venture, where we knew both interests were inclined to sell. We performed our mar- ket, exterior and public record due diligence all prior to the property being offered. We were highly organized in our approach and when the prop- erty went on the market, we were prepared with a solid offer and a meaningful hard deposit. Post-execution of our value-add strategy, we had established a very strong and stable operational track record for the property. When market- ing, we were able to highlight the stable tenant base and consistent income production of the property – factors that a broad swath of buyers will always finds attractive. Q: Was there any poten- tial you saw in this property that others didn’t? A: We focused not only on the need for strategic capital cos- metic enhancements, but also on the operational efficiency. We reduced operational costs through a variety of strate- gies, including nearly 1,200 new windows, 16 new roofs, energy-efficient lighting, and an oil-to-gas conversion that resulted in substantial savings. On the rental revenue front, we made it a priority to focus on reducing tenant arrears and vacancies and enhancing an already strong tenant base. Q: Was there a particu- larly unique strategy imple- mented at any stage in the process? A: Pride-of-ownership in both our properties and the com- munities where our properties are located is important to us. We believe that by doing well for our tenants, we’ll also ben- efit in the end. This also helps boost occupancy and decrease tenant turnover. In addition to the physical improvements to Trantor Place Apartments, we enhanced safety using video technology and coordination with local police. Q: What effect did timing play in the success of this transaction? continued on page 27A
this property? A: The New York market- place always is highly com- petitive. We identified an opportunity where the com- parable market set for afford- able, multi-family apartment complexes was limited and the values compared very favor- ably to those of other boroughs. The property is well-located, near transportation and in a safe neighborhood with limited development opportunities in the area presenting a high bar- rier to entry. Q: What made Trantor Place Apartments attrac-
tive to buyers? A: Located in the northern section of Staten Island, the property includes 106 one- bedroom and 71 two-bedroom units, and is in proximity to major bridges and highways. During our ownership, more than $2 million in upgrades were made, including new roof- ing, full-window replacement and updated energy-efficient lighting. The renovation also incorporated new landscaping, sidewalk repair and entrance- way upgrades and cosmetic work. As a result of our capital and operational improvements,
tinue to seek ou t mu l t i - family assets with strong repos i t i on- i ng po t en - tial. Castle L a n t e r r a P r o p e r - ties (CLP) ,
Elie Rieder
a privately-held New York based real estate firm, recently achieved success with the turn- around and repositioning of Trantor Place Apartments, a
One Executive Blvd; Suite 204 Suffern, NY 10901
www.castlelanterraprop.com
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