Kempner Properties of White Plains has built a portfolio of commercial and multifamily real estate comprising more than 30 sites in the Northeast that total more than 1 million square feet. It has been finding success in a variety of markets, such as New York City, Philadelphia, White Plains and New Paltz, where it recently acquired Paltz Commons, a 36-unit, garden-style apartment complex for $7.6 million.
The firm is led by managing partners and brothers Peter and Jim Kempner. The company said its acquisition criteria include building a low-leveraged portfolio by buying properties at or below replacement cost. This allows it to maintain rents that are at or below market levels. In addition to New York and Pennsylvania, it has properties in New Hampshire, Massachusetts and Connecticut.
“Kempner Properties has been investing in the lower and mid-Hudson Valley since 1992,” Peter Kempner told the Business Journal. “Our first acquisition was the New Paltz Plaza. We”™ve renovated the property twice and it”™s fully occupied.”
The company”™s acquisitions extend 60 to 250 miles out from White Plains “and we”™ve had success in investing in those areas,” Kempner said.
“The lower Hudson Valley is on fire right now; it”™s always been strong. SUNY New Paltz has always been a strong economic driver but it”™s strengthened considerably there in the last two to five years.”
Kempner said a strong attraction of the New Paltz area is outdoor recreation.
“There”™s a tremendous outdoor recreational life there that people have always been attracted to but more now. That combined with the affordable housing, being able to buy a house or rent an apartment at affordable prices and rates, has been a tremendous driver along with the proximity to New York City,” Kempner said.
“Our property Paltz Commons is located directly across the street from the Trailways bus station, which offers a bus ride into midtown of one hour and forty minutes. There are people who are actually commuting back and forth to Manhattan. I”™m not saying they”™re doing it every day, but they”™re going there for the week and coming back to New Paltz for the weekend.”
Paltz Commons is a 29,530-square-foot property made up of three buildings at 144 Main St. and was constructed in 1966. The complex is 100% leased, primarily to students at SUNY New Paltz, which is about a 4-minute walk away.
Kempner owns and manages four other properties in New Paltz: New Paltz Plaza, a 146,235-square-foot shopping center on 15.75 acres anchored by the grocery store and pharmacy Tops and an Advance Auto Parts store; Post Office Plaza, which as the name suggests houses a U.S. Post Office and two retailers; 27 North Chestnut, a free-standing one-story retail building; and 138 Main St., a neighborhood retail strip on approximately 1.5 acres.
Kempner said that when SUNY New Paltz was on a long break because of Covid between Thanksgiving and Feb. 1, most of the students who have apartments at Paltz Commons stayed there rather than going home.
The pandemic has also affected some retail leasing.
“It”™s different from market to market. We”™ve had some shopping centers where we”™ve had some issues in regard to leasing vacant space where leasing velocity was slow before the pandemic and is nonexistent right now,” Kempner said.
“With regard to certain smaller markets where there”™s not an oversupply of retail the occupancy levels have stayed high. And where we”™ve had vacancies we”™re able to fill them with new businesses and entrepreneurs who want to take advantage of opportunities where rents might be lower and the space is in good condition. In New Paltz, we”™ve had a couple of vacancies and we”™re leasing them. Our occupancy remains high.”
In markets where regional malls have depended on large national retailers that have been forced to close hundreds of stores, there are pressures that are proving difficult for property owners, he said.
“In smaller markets, in smaller spaces, there”™s been a high retention rate. We”™ve worked with all of our tenants during the pandemic. We”™ve reduced rents, offered them abatements,” Kempner said. “We view it as a partnership. We want them to be with us and succeed way beyond the pandemic so we have a responsibility to work with our tenants and provide them with the relief that is necessary for them to withstand the economic effects of the pandemic.”
Kempner said that most of his career has been spent acquiring retail properties. His two sons, Bob and Doug, came on board 3½ years ago and it was their idea to shift into acquiring multifamily properties.
“I”™m enjoying it; I think it was a great idea. Occupancy is high and what we”™re doing is buying ”˜B-minus”™ to ”˜C”™ properties in ”˜A”™ locations, nonelevator buildings,” Kempner said. “We”™re buying these rentals that are below market and adding value through extensive renovations to the apartments ”” kitchens, bathrooms, floors, painting, updated technology and improving the aesthetics to the exteriors of the buildings as well and able to add value but still being able to be below the rents of the ”˜A-quality”™ buildings.”
Kempner said that they”™re gearing toward the workforce market where he expects to see continued strong demand.
“We are in acquisition mode and growth mode and will continue focusing in on acquiring workforce-type housing in the markets we”™re in right now and possibly other markets,” Kempner said. “My brother Jim Kempner and I started this company back in the late ”™80s, and for me it”™s the greatest business in the world to have the opportunity to work with my brother and now my two sons.”
Great News for the Kempner Property Group. Over the years I have leased several properties for my real estate business and I have to say they are the best Landlords that I have ever dealt with. They are always responsive to your needs and maintain the property beautifully. I wish them much continued success.