Vantage, Angelo Gordon Pick Up AIG’s Jersey MF Portfolio for $241.5M

July 8, 2011
By Barbra Murray, Contributing Editor

Courtesy Flickr Creative Commons user eflon

July 8, 2011
By Barbra Murray, Contributing Editor

With the stroke of a pen, Vantage Properties L.L.C. and Angelo, Gordon & Co. have established a major presence in the New Jersey apartment market. The partners have just come into possession of 2,200 rental units with the $241.5 million acquisition of AIG’s six-property Central New Jersey multi-family portfolio.

The group of properties consists of apartment communities in Plainsboro, Neptune, Long Branch, Matawan and South River. Or, at least it did, as Vantage immediately sold three of the assets to Lighthouse Properties. However, the disposition still leaves Vantage and Angelo Gordon with more than 1,700 residences at Pheasant Hollow and Quail Ridge in Plainsboro and Long Brook in Matawan.

It’s no simple feat, finding a for-sale sign on what Vantage president and CEO Neil Rubler describes as an “attractive, sizeable portfolio of multi-family assets at a favorable basis.” But AIG has been in a real estate-selling state of mind. The New Jersey portfolio is part of a larger 86-property portfolio that the company acquired from Kushner Cos. in a joint venture with Morgan Properties for $1.9 billion in 2007. In January of this year, AIG sold its stake in a group of those assets to Morgan.

If any sector of commercial real estate has made a comeback from the big downturn, it’s the apartment sector. As per a report by Marcus & Millichap Real Estate Investment Services, the year-over-year national apartment vacancy rate has plummeted. And by May of this year, the number of apartment transactions over $20 million had more than doubled from the same point in 2010. “The apartment market seems to have an increased interest from both institutional and private investors, but the institutional investors really have an increased appetite, and sellers are aware of that,” Richard Robinson, partner and former president with Apartment Realty Advisors, told Commercial Property Executive. “The volume of properties on the market has definitely increased.”

Buyers are eager to grab assets, preferably more than one at a time. “Certainly, bigger is better again, which is nice,” Blake Okland, also a partner with ARA, noted. “We’re seeing a lot of demand for portfolios and we’ll see more soon. From gateway cities to tertiary markets, there is a demand for bulking up on assets. We’re getting back to a place where people are willing to put out more investment dollars at one time.”

For Vantage, the AIG transaction marks a new beginning. The company utilized the purchase as the springboard for the introduction of Candlebrook, a new subsidiary that will center its activities on suburban rental housing. As for the company’s decision to venture beyond the borders of the State of New York, New Jersey was a good pick, judging by the numbers. According to the Marcus & Millichap report, the average apartment vacancy rate in the Garden State is forecasted to drop to just 3.7 percent by year’s end.

*This story was updated July 11, 2011, at 9:09 a.m. EST.