July 24--Kushner Cos. has bought two garden apartment complexes in Hasbrouck Heights for $57.5 million, reflecting its renewed interest in multi-family rentals, the real estate market's hottest sector.
The Hasbrouck Heights deal announced Monday is Kushner's first acquisition of New Jersey rentals since the company sold almost all of its multi-family complexes -- almost 17,000 apartments in five states -- for $1.9 billion in 2007. Kushner sold the properties to a joint venture of insurance giant AIG and Morgan Properties, which is in suburban Philadelphia.
At that time, Kushner, which was founded in Florham Park and is now headquartered in New York, said it wanted to focus on office buildings in New York City. The prime example of that shift in focus was Kushner's $1.9 billion purchase -- a U.S. record for a single building -- of the 41-story office tower at 666 Fifth Avenue.
That investment, which carried a lot of debt, soon ran into trouble as the economy deteriorated and office and retail space became harder to fill. Kushner has since restructured the 666 Fifth Avenue deal and sold stakes to outside investors. Its headquarters are in the building.
Kushner has recently returned to its multi-family roots, buying over 5,300 apartments last year. Multi-family rentals are the most active segment of the real estate market. Demand for rentals has been pushed up because many households have lost their homes to foreclosures, and others can't qualify for mortgages to buy a home.
The Hasbrouck Heights complexes are the 124-unit Skyline Apartments at 20 Terrace Ave., built in 1950, and the 214-unit Boulevard Apartments at 398 Church St., built in 1951. The brick buildings contain one- and two-bedroom apartments with rents ranging from $965 to $1,425.
The complexes were sold by their original builders, a partnership between Hekemian & Co. of Hackensack and Herbert Klein. Hekemian did not return a call seeking comment.
Kushner did not release the purchase price, but a source close to the deal said it was $57.5 million, and was funded in part by a $42-million bank loan.
"We will continue to invest in these properties, which are located in one of the best rental markets in the country," said Jared Kushner, CEO of Kushner Cos.
Kushner Cos. is involved in property ownership, management, development and redevelopment. The company owns more than 13,000 multifamily apartments as well as 7 million square feet of office, industrial and retail space in New York, New Jersey, Pennsylvania and Illinois.
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