by Melissa Bailey | Oct 9, 2012 2:02 pm
Westville Apartments Sell For Chart-Topping Price
Singapore’s largest private bank found the best place to sink $41.65 million—a financially troubled apartment complex in Westville.
Wintergreen of Westville, a 294-unit housing development at 400 Blake St., sold on Sept. 25 to UOB Eagle Rock Multifamily Property Fund LP for $41.65 million, or nearly $142,000 per unit.
The new owner is a private equity fund run by a Long Island real estate company and United Overseas Bank (UOB), Singapore’s largest private bank. The fund focuses on investments in “U.S. suburban multi-family housing communities.” It has bought two other apartment complexes in the past two months in Connecticut—Beacon Mill Village, a converted textile mill in Beacon Falls, and Britannia Commons, a converted schoolhouse in Meriden.
The company was attracted to the Westville complex for its “great tenant base,” the “quaint downtown,” and the “local pride” of the neighborhood, said UOB Eagle Rock Multifamily Property Fund LP partner Rishi Gupta. “We really like the community.”
Wintergreen, a gated community of five apartment towers, was built in 2007 at an old factory site in the shadow of West Rock. Its sale was the largest sale of a residential complex in the state this year, by total sale price, according to Steve Witten of Institutional Property Advisors, the brokers on the deal.
Local boosters welcomed the news.
“I was surprised at how strong the interest was and what it sold for,” said Erik Johnson, head of the Livable City Initiative, the city’s anti-blight agency. “It’s just evidence of how strong the market is. At a time when there is not a lot of confidence in other markets, there is confidence in this market from outside New Haven.”
“People wouldn’t invest if they didn’t think they could get a return on their investment,” Johnson noted. He said he has seen a change “from individual to institutional investors deciding to put their capital in play in the city.”
The new landlord pledges to bring stability to the complex after it fell into rocky financial footing.
Virginia-based developer and owner, Metropolitan Development raised some eyebrows several years ago when it announced it would build a nearly 300-unit complex near the heart of Westville.
“There was a lot of concern in the neighborhood” when the complex was built, recalled Chris Heitmann, director of the Westville Village Renaissance Alliance. Neighbors wondered if there was enough demand for housing to fill it.
The project was a reach for the developer, Johnson said. Metropolitan Development “didn’t have a footprint in Connecticut or the Northeast. They tried to do something that wasn’t in their building model.”
Metropolitan Development took out a $50 million loan to finance the project. In March of 2011, U.S. Bank filed for foreclosure. Later that year, in December 2011, Metropolitan Development lost the property to foreclosure, land records show.
The property changed hands twice before UOB Eagle Rock snatched it up from SA Wintergreen LLC. The new owners plan to stick around and manage the property, Gupta said. They’ll do so through Eagle Rock Management, the Long Island-based management company that partnered with UOB to create the private equity fund. Gupta said the name of the complex will stay the same for now, though Eagle Rock typically rebrands its apartment complexes after acquiring them. Gupta didn’t say if rents would change: “Any owner would want to have higher rents, but you have to be wary of what’s acceptable by the market.”
Gupta said despite the foreclosure action, the complex remains “fairly well occupied” (he declined give a percentage). Three-quarters of the apartments are two-bedrooms; the rest are one- and three-bedroom, according to property manager Sandra Vescera. The average apartment size is 1,100 square feet. The complex offers 586 parking spots, most of them on the ground level beneath the apartment towers.
Vescera, who’s worked at Wintergreen for five years, is one of three office staff and five maintenance workers that had worked for the past management company, Riverstone Residential Group. They all got to keep their jobs. Now they work directly for the landlord.
On Monday afternoon, some of those workers were busy applying fresh white paint to an apartment that had been recently vacated. The paint job amounted to routine maintenance, according to the workers.
“Sparse” Inner Sanctum
Gupta said his company has bigger improvements in store, particularly for the vast inner courtyard that spans the five apartment buildings.
“Right now when you go to the community, it feels a little sparse—it feels a little institutional,” Gupta said. The courtyard is basically empty except for a small building that houses a gym, two grills, and a table with a bare trellis overhead. His company aims to make the space more “child-friendly.” Possible improvements include a children’s play area, some gazebos, a fire pit, and more benches, Gupta said.
A nearby pizza shop, whose bright signage blares from a small strip mall tucked into the complex, was never part of Wintergreen, Gupta said. The owners refused to sell the property when Wintergreen was built.
Around Wintergreen Monday, tenants offered several suggestions for ways to improve their home.