TruAmerica Multifamily believed something was missing geographically in its portfolio, but that was remedied in June when it bought The Grove Somerset, a 384-unit apartment community in Somerset.
Based in Los Angeles, TruAmerica would not disclose the purchase price or how much it intends to spend on renovating every unit in the complex over time.
But with properties in the Boston and Washington-Maryland areas and none in the metro New York area, the property made sense for TruAmerica, especially given that the acquisition price was below replacement cost, said Wes LaBar, executive managing director and head of acquisitions.
“It was kind of the most obvious hole in our portfolio, and I did not have a good reason not to be in New Jersey,” LaBar told Jersey Digs in an interview. “You could not build it at the cost that we bought it today.”
LaBar said the New York-New Jersey-Connecticut market has “all the fundamentals” and his company should be there.
“What we were really looking for is stability, and New Jersey presents this stable economy, stable job growth, and stable employment,” he said.
The Grove Somerset sits on 42 acres and includes studio, one- and three-bedroom apartments, as well as townhouse-style rentals. Amenities include a clubhouse, “resort-style” swimming pool with sundeck, fitness center, grilling/picnic areas, playground, game room, dog park, EV charging stations and garage parking.
While the 500 Bristol Boulevard property has been well maintained, according to the company’s announcement, about 95% of the apartment interiors remain in original condition and will be renovated as they become vacant.
“The strategy is to renovate units and improve the quality of living and quality of the apartment for the resident base without overshooting and pricing people out of the market. That’s a really important balance for us,” the executive said.
More acquisitions are expected in the metro New York-New Jersey-Connecticut area, he said.
Questions that TruAmerica asks about markets are whether rents are stable, what the supply looks like in a five- to 10-mile radius, what the capacity of the area is to absorb that supply, and whether occupancy is “heading in the right direction,” LaBar explained.
Demand outstripping supply of housing in New Jersey has been in the news this year, with Gov. Mikie Sherrill and the Legislature pushing hard to ensure adequate housing and a supply of affordable housing for the workforce.
Recently, Gov. Sherrill announced plans to expand housing and lower costs in New Jersey.
“We simply cannot afford 10-year studies while housing becomes more and more unaffordable,” the governor said in a statement. “If we want the next generation to stay here, build careers here, and raise families here, we have to make housing more affordable in New Jersey, which is why my administration is hitting the ground sprinting on housing affordability.”
TruAmerica Multifamily was founded in 2013 and has $16 billion in assets under management across the nation. Its portfolio includes 65,000 apartments across 20 states.
The Somerset transaction was sourced and facilitated by CBRE’s Investment Sales team, led by Vice Chairman Jeffrey R. Dunne, First Vice President Stuart Mackenzie, Director Travis Langer, and Financial Analyst Eric Greenberg, according to TruAmerica. The seller was an affiliate of Harbor International Group.
LaBar said his company has an ongoing relationship with the Harbor Group, and the proposed sale of The Grove Somerset was shown to only a few groups, including TruAmerica.
“We’re big believers in the metro. We’re big believers in New Jersey,” said LaBar, who grew up in Mahwah before moving with his family to California in his freshman year of high school.
