A private Boston-area investment company led by a father-and-son team has followed its spring debut in Westchester County”™s commercial real estate market with a record-setting $210.4 million purchase of a high-rise residential tower in downtown New Rochelle.
DSF Group, based in suburban Waltham, Mass., recently closed on its acquisition of Avalon on the Sound East, the 588-unit, 39-story luxury apartment tower at 40 Memorial Highway that was developed and opened in 2007 by AvalonBay Communities Inc. DSF paid approximately $357,000 per unit in the deal, which brokers for the seller called the largest recorded multifamily housing sale in the county.
With the sale, AvalonBay Communities disposed of the second of its two high-rise residential towers in the city on Long Island Sound. The publicly traded real estate investment trust, based in Arlington, Va., still maintains a strong presence in the Westchester market as the owner of Avalon-branded multifamily developments in Bronxville, Elmsford, Mamaroneck and White Plains. The developer in 2014 plans to open a 168-unit apartment complex, Avalon Ossining, on a 15-acre former chemical company site at 217 N. Highland Ave. in Ossining.
In downtown New Rochelle, Hartz Mountain Industries, a commercial real estate developer in Secaucus, N.J., in 2010 paid $107.5 million for AvalonBay”™s 24-story, 412-unit Avalon on the Sound tower at 255 Huguenot St. The former bird feed company at the time of its New Rochelle purchase said it planned to invest $1 billion in amassing a new portfolio of apartment properties.
With the recent sale of Avalon on the Sound East, Hartz Mountain takes over management of its high-rise tower from AvalonBay, which had continued to operate both residential buildings.
DSF”™s new property includes one-, two- and three-bedroom units averaging 956 square feet of space, as well as 7,607 square feet of ground-floor retail space, about half of which is currently leased.
The record price-fetching property was marketed for AvalonBay by an investment sales team at Holliday Fenoglio Fowler L.P. Andrew Scandalios, a senior managing director at HFF who heads its New York City office, in a press release said Avalon “saw an opportunity to capitalize in a strong investment market.” When HFF listed it on the market last June, Avalon East had a 98 percent occupancy rate.
Its new owner immediately put its brand on the former Avalon building, renaming it Halstead New Rochelle Metro North. DSF earlier this year renamed its first Westchester County purchase, the former AVE White Plains building at 25 Martine Ave., the Halstead White Plains Metro North.
DSF paid $34 million for the approximately 90,000-square-foot building in downtown White Plains and has converted its extended-stay corporate apartments into 124 boutique luxury apartments.
Joshua Solomon, president and chief investment officer at DSF Group, in June said the company was “intent on getting a toehold in this market” and was especially focused on investments in Westchester and Fairfield County, Conn.
At press time, Solomon could not be reached for comment on DSF”™s major investment in New Rochelle.
Solomon in 2000 co-founded the private real estate investment firm with his father, Arthur P. Solomon, and a third partner, Thomas Mazza, DSFӪs chief operating officer. The elder Solomon was senior partner and head of real estate investment banking and real estate principal investments at Lazard Fr̬res & Co. and served as CEO of LazardӪs five real estate funds. He previously founded and was senior partner of the real estate investment banking group at Drexel Burnham Lambert.
With offices in suburban Boston and the Washington, D.C., suburb of Alexandria, Va., the DSF Group has invested more than $2 billion in about 5 million square feet of commercial and residential space. DSF Group was selected 2011 Multifamily Development Firm of the Year by the National Association of Home Builders.
Ralph DiBart, executive director of the New Rochelle Downtown Business Improvement District, said the new downtown landlord is “very interested in getting the retail space rented as a priority” in the high-rise building. With the Halstead New Rochelle Metro North building accounting for a large share of downtown residents and potential customers for BID businesses, he said DSF is expected to foster “a lot more engagement between businesses and residents in the building than they have in the past.”
“We see this as a new surge of energy and commitment to the downtown,”™ DiBart said of the record-setting deal. “That”™s a breath of fresh air and new excitement and we”™re very, very optimistic about the new ownership.”
