Home Economic Development Downtown New Rochelle apartment tower sells for $259 million

Downtown New Rochelle apartment tower sells for $259 million

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A 40-story apartment tower at 40 Memorial Drive in New Rochelle has changed hands for $259 million, more than doubling the county’s previous top 2018 sale price.

Photo by Ryan DeffenbaughThe Virginia-based Harbor Group International announced Dec. 5 that it has acquired the apartment tower near the city’s train station, with partner Azure Partners LLC. The seller, DSF Group, bought the 588-unit apartment tower in 2013 for $210 million.

Formerly called Halstead New Rochelle Metro North, Harbor Group has rebranded the apartments as Skyline New Rochelle. The tower was built in 2007 by AvalonBay Communities and also features about 8,000 square feet of ground floor retail space and a parking garage. The apartments are 95.6 percent occupied as of the sale, according to Harbor Group International. They include a mix of studios and one, two and three bedrooms.

The building is less than a quarter-mile from New Rochelle’s Metro-North train station, and across the street from the New Rochelle Public Library.

The New Rochelle Industrial Development Agency approved the property for a 30-year payment in lieu of taxes agreement in 2004, and therefore had to sign off on the sale. The agency voted to approve the sale, along with a mortgage recording tax exception totaling $361,000, at its October meeting. The IDA also collected about $1.2 million in transaction and application fees.

The purchase marks the first in Westchester for Harbor Group International, which is headquartered in Norfolk. The company has been expanding its New York metro investments, according to its press release, which now total $1.5 billion in office, retail, industrial and multifamily properties, as well as debt investments. By the company’s count, its global assets total more than $8 billion.

“This property continues HGI’s strategy of acquiring class A assets in top-tier markets with great demographics and strong employment drivers,” said T. Richard Litton, Jr., president of HGI.  “New Rochelle is a New York City Metro commuter hub with easy access to multiple forms of transportation. The property has been maintained to a high standard and has a wide assortment of quality amenities.”

HGI said it would spend $5.5 million on interior upgrades to about 375 apartments, including improved cabinets, appliances, lighting, door and smart thermostats.

The Boston-based seller, DSF Group, still owns an apartment tower a block over in New Rochelle. The company bought La Rochelle, a 25-story building with 412-market rate apartments at 255 Huguenot St., for $148.5 million in 2016.

The sale marks the second downtown apartment building DSF has offloaded in Westchester in as many years. In 2017, DSF sold its Halstead White Plains Metro-North apartment building for $35 million. The 124-unit tower at 34 S. Lexington in White Plains was rebranded as “The Metro” by its new owner, Ginsburg Development Cos.

In between those two sales, DSF also made a big buy in Westchester. The group in March bought the 300-unit Talleyrand apartment complex in Tarrytown for $91 million.

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