In a joint venture with Toronto-based real estate private equity provider Firm Capital Organization, Rhodium is making extensive capital improvements to a portfolio of multi-family rental buildings in Central Harlem. The portfolio of eight walk-up buildings, which includes a total of 127 apartments and two commercial retail units, was purchased by Rhodium and Firm for $37 million, which includes a multi-million-dollar budget for capital improvements.
The purchase was Firm’s first major investment in the U.S., and solidified the company as part of Rhodium’s extensive network of partners throughout the real estate, private equity and financial arenas.
600 Pavonia is an 8-story office building comprised of approximately 85,000 SF containing 17 tenant spaces and is located in the Journal Square neighborhood of Jersey City, NJ.
Situated steps away from the Path train and accessible by I-78, and directly across from a $1 billion residential development, the building benefits from significant Class A Office demand.
The property, historically focused on medical offices, was purchased from a retiring physician owner/user. With the retirement of the owner and certain other doctors, at Closing, the vacancy became (an anticipated) 40%. During the contract period, the sponsor, Rhodium Capital Advisors, secured leases at full market rates for many of the vacant units, greatly enhancing the building’s value at the closing table.
The Journal Square neighborhood is making a comeback with many residential towers set to rise over the next few years with more than 5,000 apartments. Developers KRE Group, Kushner Companies, and National Real Estate Advisors are building three residential towers focusing on the proximity to public transportation and ease of commute into Manhattan.
Northern Manhattan 13 Building Portfolio
Rhodium identified an outstanding opportunity in a portfolio of 13 buildings in Upper Manhattan. The rent roll included $1.2 million of preferential rent with $900,000 of that being month-to-month tenants. In addition, 35% of the rent roll was market-rate units that were below market.
Rhodium’s business plan involved bringing all of the units to market rents and investing several million dollars to implement a comprehensive modernization program for the common areas and the apartment units.
Within the first 18 months of ownership, Rhodium brought all of the available units to market rents, generating a substantial increase in revenues. Moreover, Rhodium executed on its capital improvement plans by upgrading lobbies and units, installing CCTV security cameras, and providing tenants with a virtual doorman/intercom service as well as a package drop-off room in lobbies.