Teaneck, N.J.-Based Company Well Positioned for Further Growth Into New York City’s Affordable Housing Market
NEW YORK – Treetop Development, LLC has recently completed its second portfolio sale in the northern Manhattan market in the past three months with a third transaction expected to close in the 3rd quarter of 2014.
The Teaneck, NJ-based multi-faceted real estate concern — which has become one of the area’s most active apartment owners adding more than 700 rental units to its New York City portfolio in the past year — completed both sales with high internal rates of return, positioning the company to aggressively pursue new acquisition opportunities and replenish its assets in emerging New York City neighborhoods. Treetop Development is currently in contract to acquire more than 400 apartment homes in Upper Manhattan.
The most recent sale included two mixed-use buildings with 59 units at 220 West 116th Street and 449 West 125th Street in Harlem. The properties, which were initially purchased by Treetop Development in November of 2012 for $8.8 million, sold for $15.4 million.
The 46,080 sq.-ft., five-story, 40-unit, walk-up building at 220-226 West 116th Street between Adam Clayton Powell Jr. and Frederick Douglass Boulevards features five retail units and 35 rent stabilized apartments. The 16,382-square-foot, six-story, 19-unit, walk-up building at 449 West 125th between Morningside and Amsterdam Avenues consists of two retail units and 17 rent stabilized apartments.
The deal comes on the heels of the $60 million sale of a portfolio of twelve mixed-use apartment buildings consisting of more than 153 apartment homes and 23 commercial spaces in the Upper West Side. The sale price represented a thirty-one percent internal rate of return for the properties which Treetop purchased in February of 2012 and aggressively managed for 26 months.
Treetop Development’s strong investment and involvement in northern Manhattan is part of a trailblazing acquisition and expansion philosophy implemented in 2012 that has placed the company as a pioneer in resolving New York City’s current affordable housing dilemma.
“Two years ago we realize a significant lack of affordable housing in Manhattan and began purchasing underutilized apartment buildings in promising neighborhoods at value-added prices,” says Adam Mermelstein, principal of Treetop Development. “We strongly believed working class families, young professionals, and students priced out of more expansive residential addresses would be drawn to up-and-coming areas in Harlem and the Upper East and West Sides that had a high commutability factor and reasonable rents.
“Each property underwent an extensive capital improvement programs to provide this underserved demographic with high quality, modern housing options within their budgets,” adds Azi Mandel, another Treetop principal. “It’s proved to be a trendsetting approach that has caught the eye of large and midsized investors looking to enter these growing markets. By purchasing, renovating and selling these properties with favorable profit margins, we can further increase New York City’s affordable housing by spreading our approach to even more neighborhoods.”
Treetop Development expects to expand its portfolio north taking advantage of premium acquisition opportunities in emerging neighborhoods in Central Harlem, Washington Heights and Inwood. Its current holdings stretch from the Upper West Side and Upper Harlem to Rego Park, Queens.
For additional information on Treetop Development, please call 973-622-0073or visit www.treetopdev.com.
About Treetop Development, LLC:
Led by General Partners Azi Mandel and Adam Mermelstein, Treetop Development, LLC is a multi-faceted real estate concern with a focus on renovating and developing buildings in key urban centers throughout the New York Metropolitan area. In addition, the company has initiated an aggressive plan to acquire existing HUD apartment complexes and institute capital improvement programs to upgrade and modernize the assets, including living spaces, common areas and building systems before returning them to market.