Newmark Grubb Knight Frank (NGKF) Capital Group has closed the sale of Park Terrace Apartments in Chester, Penn., for $3.4 million on behalf of the seller, Los Angeles-based City National Bank. The deal was the third sale NGKF has completed on the bank’s behalf in the past 12 months.
“Even though this asset was highly distressed, our analysis showed investors the potential for a nine percent annual return in the first year with repairs and some basic repositioning,” said John “Judd” Dunning, a director with NGKF Capital Group.
Dunning, who is based in Los Angeles, represented the client along with Chris Hansen, a principal in NGKF’s Houston office. James Mullarkey, a principal in the Philadelphia office, provided local assistance with the transaction.
The 216-unit multifamily complex at 1127 Ward St. is a Class C complex located just outside of Philadelphia. That proximity to Philadelphia, where apartment vacancy is low and multifamily properties trade at higher prices, created the potential renter demand that made the deal work for the undisclosed private investor who purchased the asset, Dunning said.
The team overcame several challenges in marketing the asset for sale. The bank took control of Park Terrace Apartments, an FDIC Loss Share asset, after buying the failed Imperial Capital Bank. The previous loan was at $6.15 million or $28,472 per unit. Lengthy bankruptcy proceedings and eventual foreclosure had left the property in disrepair, with mold and water damage to 91 units as well as unrepaired damage from a small fire. In all, the complex needed approximately $3.75 million in reported repairs.
“Whether the asset is Class A, B or C, large or small, we commit to resolving our clients’ needs,” Hansen said. “It’s what we are passionate about and we are well-equipped to tackle difficult property listings.”
The team has used its institutional service platform to close several sales for City National Bank across the country. Previous deals with the bank include the sale of Hidden Pines Apartments, a distressed, 170-unit complex in Atlanta; and the sale of the 64-unit Arcadia Downs Apartments, also in Atlanta. Currently, the team is marketing Tanglewood Apartments in Bay City, outside Houston, for the bank.
About Newmark Grubb Knight Frank
A part of BGC Partners, Inc. (NASDAQ:BGCP), Newmark Grubb Knight Frank is one of the largest commercial real estate service firms in the U.S. It brings together the strategic consultative approach to creating value for clients and leading position in the New York market that are hallmarks of Newmark; the complementary strengths of Grubb & Ellis in leasing and management, investment sales, valuation and capital markets services; and BGC’s financial strength, proprietary technology, expertise in global capital markets and deep relationships with many of the world’s leading financial institutions.
Newmark Grubb Knight Frank and its London-based partner Knight Frank together operate from more than 300 offices in established and emerging property markets on five continents. This major force in real estate is meeting the local and global needs of tenants, owners, investors and developers worldwide.