PORT ORCHARD, WA - A newly formed joint venture of New Standard Equities (NSE) and an affiliate of Brixton Capital has acquired Arbor Terrace, a 276-unit multifamily community in Port Orchard, WA, from Sea 1800 Sydney Avenue, LP in a transaction valued at $38.15 million.
Arbor Terrace is the second acquisition in the immediate area in less than two months and third in Kitsap County in the past year for NSE, a Los Angeles, CA-based real estate investment and management company, noted CEO and founder Edward Ring.
“We love the value-creation opportunity at Arbor Terrace,” said Ring. “When we initially looked at this asset we immediately saw a tremendous potential to improve the property’s cash flow through renovation. Given that the US Navy is such a huge economic driver in the County, we became even more excited about the prospects for continued long-term growth in this submarket.”
NSE’s $3 million repositioning budget includes a full renovation of the asset’s 1995-vintage unit interiors, and improving the fitness center, leasing facility and general curb appeal of the property.
Arbor Terrace complements NSE’s recent $13.25 million value-add acquisition of the 120-unit Village Fair apartments in Bremerton, WA from a private seller. NSE plans to invest an additional $1.8 million to bring Village Fair, a 1984 vintage asset, up to modern standards. The two assets, in combination with Sea Glass Village, a 182-unit community the firm purchased in March of 2016, brings NSE’s asset base in Kitsap County to 578 units, at a total cost basis of more than $65 million.
Andrew Kirsh, co-founder and head of the real estate practice at Los Angeles-based law firm, Sklar Kirsh LLP, represented the buyer in this transaction, and was instrumental in bringing together NSE and Brixton Capital Group. “The market volatility following the election created a challenging atmosphere which seriously threatened the deal,” said Kirsh. “I was happy to be in a position to bring the two groups together to launch an important new joint venture, not just for this transaction, but for other value add opportunities that will benefit both firms in the future,” he said.
The acquisition was leveraged with a $30.15 million loan from Freddie Mac, which was arranged by CBRE’s Capital Markets Group led by Vice Chairman Brian Eisendrath.