Spinnaker Real Estate Partners L.L.C. is forming a residential affiliate as it seeks to tap into the burgeoning market for multifamily residential units across the tri-state region.
Through Spinnaker Residential L.L.C., the Norwalk, Conn., developer, whose projects to date have been concentrated in Fairfield County and Portland, Ore., hopes to expand into New Haven, Westchester County and parts of New Jersey, executives said.
“The apartment business, the rental business, has been the highlight of the real estate industry over the last two or three years,” said Mark Forlenza, a founding partner of Spinnaker Residential. “We”™re beginning this project at just the right time.”
Clayton Fowler, chairman and CEO of Spinnaker Real Estate Partners and a founding partner of the company”™s residential affiliate, said one of Spinnaker”™s primary goals will be to seek out development opportunities in Westchester, where he said demand for rental housing currently exceeds supply.
“We”™re looking forward to being in Westchester because they do need housing production there of all sorts,” Fowler said.
Spinnaker does not have any properties in Westchester to date, but in June the parent company signed a memorandum of understanding with the village of Pelham to convert village-owned parking lots into a 110-unit apartment complex.
With recent graduates and younger families choosing apartments close to urban centers and empty-nesters increasingly seeking to remain in the Northeast, the residential apartment market is ripe for the picking, Forlenza said.
“I think you”™re seeing the revival of the market,” he said. “During the last four years, nothing was built for all intents and purposes. That, coupled with the expanding markets of both newly formed families and those desiring to maintain a mobile, flexible lifestyle, means you”™re going to see a pretty robust need for apartment construction for several years to come.”
Forlenza joins Spinnaker Residential after serving as an officer of AvalonBay Communities Inc., which is one of the dominant forces in the suburban New York City rental market with residential communities in Bronxville, Elmsford, Mamaroneck, New Rochelle and White Plains, among others.
He said Spinnaker Residential will likely not match AvalonBay in the quantity of projects it undertakes, but said the company”™s goal is to focus “on the best deals.”
“We”™re going to do enough in the best locations for superior performance not only for our investors but also for our customers,” Forlenza said.
Spinnaker Residential will initially focus on projects within a 50-mile radius of Norwalk and will explore both new developments and the repositioning of existing buildings that are available for acquisition, Forlenza said.
Along with Forlenza and Fowler, Spinnaker Residential principals include Kim Morque, who has been a principal with Spinnaker since 1998, and Frank Caico, who has more than 15 years of experience in land use planning and development.
Initially, projects will be capitalized from “internal resources,” Fowler said, with the company ultimately hoping to recruit investors on a deal-by-deal basis.
Spinnaker Real Estate Partners currently owns, develops and manages 11 properties in Fairfield County, including Stamford”™s The Campus, a joint venture with Steven Wise Associates L.L.C. that is home to Chelsea Piers Connecticut.
Also included in Spinnaker”™s portfolio are nine developments in Portland, Ore., and one in St. Louis, Mo.
A key factor in the creation of a residential affiliate was a desire to separate the company”™s residential development activities from its commercial and retail ventures, Fowler said.
“We do adaptive reuse, we do office, we do residential,” he said. “We do so many things and it”™s so hard to focus on any one thing. We felt that in view of the world today … that we ought to focus on something that we do sort of casually, and that”™s apartments.”
Fowler said Spinnaker Residential will differentiate itself by choosing the most sought-after locations and emphasizing design and aesthetics.
“Today”™s rental is of much higher quality in terms of design and living space, as well as available amenities,” he said.
Added Forlenza, “What we”™d like to say is that the living room is the street, where people are going to be spending a lot of time in their neighborhood as opposed to in the swimming pool. We think that the trend is much more toward the rejuvenation of urban areas because of the fact that people bouncing into people is what living today is all about.”
