One of the major multifamily rental buildings in New Rochelle is being sold to a Boston company that owns its sister building.
DSF Group is in contract to buy La Rochelle, a 25-story tower with 412-market rate apartments at 255 Huguenot St. The current owner is Hartz Mountain Industries of Secaucus, N.J.
DSF already owns Halstead New Rochelle Metro North, around the corner at 40 Memorial Highway. Both buildings were developed by AvalonBay Communities in the late 1990s and were at the forefront of a downtown residential renaissance that is still going strong.
La Rochelle was built across the tracks from New Rochelle Station, the city”™s transportation hub that serves Metro-North”™s New Haven Line, Amtrak”™s Northeast Regional line and the Bee-Line Bus System.
The high rise includes a parking garage with 707 spaces and about 5,400 square feet of retail space. It has 17 full-time and three part-time employees.
The sale price has not been disclosed. City officials said they expect the deal to close later this month.
Hartz Mountain bought La Rochelle, then known as Avalon on the Sound, for $107.5 million in 2010.
DSF paid $210.4 million for the Halstead, a 588-unit, 40-story tower, in 2013, when it was known as Avalon on the Sound East.
The New Rochelle Industrial Development Agency approved the La Rochelle sale at a public meeting on Aug. 30. The IDA controls the land and had granted tax exemptions and benefits to AvalonBay.
The IDA approved a mortgage recording tax exemption for DSF, estimated at $400,009, based on the expected amount of new debt. The agency also released Hartz Mountain from its obligations under a lease with the IDA and consented to the assignment of Hartz”™s lease to DSF. A 30-year payment in lieu of taxes agreement remains in effect.
The city and IDA will receive about $1.5 million in transaction fees and a percentage of additional debt that DSF takes on to finance renovations, according to City Manager Charles Strome.
Commissioner of Development Luiz Aragon said DSF plans to renovate apartments as they become available and make upgrades throughout the building.
“We plan to apply the same successful strategy” to the La Rochelle as applied to the Halstead, Thomas W. Mazza, DSF”™s chief operating officer, said in a letter to the IDA. DSF created a clubroom and converted the 40th floor banquet space to a health club at the Halstead. It also renovated the lobby, leasing office, pet park, courtyard and corridors.
Mazza said the renovations will improve the quality of the building and contribute to the city”™s revitalization.
DSF is a private real estate company founded in 2000 by Arthur P. Solomon, Joshua Solomon and Mazza. It focuses on high-growth, vacant or undeveloped urban locations in the Boston, New York and Washington metropolitan areas. The company manages about 3,000 rental units worth $1.2 billion.
La Rochelle will be put in the company”™s DSF Multi-family Real Estate Fund III, which is expected to close in December with $400 million in investments.
The transaction is a testament to the city”™s development strategy, Aragon said. “It shows that New Rochelle is open for business.”
