Tokyo Trust Capital and MCRE buy Westchester apartments for $143M

The Real Deal,

By Cailley LaPara

Deal marks first U.S. multifamily play for Japanese investment firm, which says it’s eyeing further acquisitions

A Japanese investment firm with an appetite for American apartments has teamed up with a local partner on its first stateside multifamily deal.

Tokyo Trust Capital and New York-based MC Real Estate Partners jointly acquired the View on Nob Hill Apartments, a 416-unit complex in Elmsford, from Ares Management for $143 million, the firms said last week.

The off-market deal marks the first multifamily acquisition in the U.S. for TTC, which manages cross-border investments both into and out of Japan for its clients. The deal was made on behalf of “a large Japanese financial institution,” the firms said, though MCRE declined to name the investor. SMBC financed the acquisition.

Los Angeles-based Ares bought the garden-style complex at 32 Nob Hill Drive, located just off the Saw Mill River Parkway, about 20 miles north of New York City, from Westchester-based investor Frank Palazzolo for $101 million in 2018.

Ares renovated about 60 percent of the units, according to MCRE. The new owners plan to renovate more units as they become vacant, but are not in a rush to do so; the complex is currently 97 percent leased, with 20 percent of the units set as affordable for households earning below 60 percent of the area median income.

“We like the optionality of a property like this,” said MCRE managing principal Andy Nathan. “There’s a value creation opportunity.”

Prior to the Nob Hill deal, MCRE and TTC partnered together on two commercial investments in the U.S., including an office and retail building at 434 Broadway in Soho, which they bought from Savanna for $103 million in 2020, and a 100,000-square-foot office building in Washington, D.C.

“We were attracted to the property because it has two attributes that we think are really important,” said Nathan. “It’s mid-market housing and people don’t build new mid-market housing. And it’s mid market housing in a terrifically enduring location.”

The partners said they plan further multifamily investments in the U.S. real estate market, which TTC CEO Minoru Machida described in a statement as “very attractive to Japanese investors due to unparalleled transparency and liquidity, backed by the most vibrant economy in the world.”

Original Article