Springfield, NJ — The KRE Group has acquired Summit Hill, a 228-unit rental community in Springfield for $70 million, in partnership with Avenue Realty Capital, a real estate investment firm focused on multifamily and mixed-used properties in the New York metropolitan area.
Summit Hill, located at 100 Stone Hill Rd., is a garden style apartment community tucked away in a wooded setting near the nexus of Routes 78 and 24 in western Union County. It is the latest of three garden apartment acquisitions totaling over $222 million that KRE has completed in 15 months, comprising over 1,065 apartment units.
The Summit Hill acquisition is part of a strategic initiative KRE has launched to substantially grow its “value-add” multifamily business. The company purchased Deer Creek, a 288-unit rental community in Plainsboro for $45.5 million in February, 2016, and Royal Gardens, a 550-unit rental property in Piscataway, NJ, for $107.25 million in November, 2015.
Like Deer Creek and Royal Gardens, KRE sees its acquisition of Summit Hill as an opportunity to enhance tenant quality of life and increase the property’s value through capital improvements.
“The common thread in all three of these assets is they are well-located properties in high-demand, supply-constrained markets, and they all offer the opportunity to create value through investments in capital improvements, unit renovations and improved property management,” said Darin Raiken, director of acquisitions for The KRE Group. “We have already had considerable success implementing this strategy at Deer Creek and Royal Gardens, and we identified Summit Hill as a property with similar potential.”
Summit Hill has historically been a well-occupied community, with average occupancy rates in the mid to high 90 percent range. It is situated in a scenic hillside location atop Baltusrol Mountain with walking paths, tree-lined streets, an outdoor pool and a tennis court. As part of the property upgrades, the KRE/Avenue partnership plans to build a brand new clubhouse and state-of-the-art fitness center.
KRE has a number of additional upgrades planned for its recent garden apartment acquisitions, some of which are well underway. The company will renovate unit interiors, including the addition of new kitchen and bathroom finishes and washer/dryers. It is also initiating major capital improvements such as new roofs, parking and sidewalk repairs, and landscaping upgrades.
“Since beginning this strategic initiative, we have deployed more than $222 million in acquisition capital and we continue to actively seek out new opportunities,” said Jonathan Kushner, President of The KRE Group. “As the New Jersey rental market continues to evolve, we believe this is a component of the market that is poised for incredible growth.”