EAST-SIDE LUXURY APARTMENTS SELL WELL
By Steven Scarpa
As seen in the Record-Journal

MERIDEN - Newbury Village, a brand new luxury apartment complex on Pomeroy Avenue, has been sold

for $30.2 million, a transaction some local business

leaders believe may augur future investment in the city.

"I think it must be successful if it sold that high and that well," said Peggy Brennan, the city's economic development director.

The price for the property - which was owned by Newbury Village Development LLC, an affiliate of Tarragon Corp. of Dallas, Texas, and was sold to Rabin|Alexander LLC - works out to about $168,000 per unit or $171 per square foot. The final closing price was $3 million less than requested on the offering summary prepared by Marcus and Millichap Investment Real Estate Services.

There are two two-story, and two four-story buildings on the 10.4-acre parcel. Of the 180 units, 16 are studio apartments, 64 have one bedroom and 100 units have two bedrooms. The average rent is $1,358 per month, ranging from $925 for a studio apartment to $1,685 for a two-bedroom apartment with two bathrooms. The complex costs about $1 million to operate and nets an income of $19 million, a dollar amount expected to go up about $200,000 in the future, according to the offering summary.

Residents also have access to a clubhouse and swimming pool, as well as private garages for 53 of the units. Ninety-six percent of the development is currently rented out. "I think that would definitely indicate that the market is hot right now," said Sean Moore, president of the Greater Meriden Chamber of Commerce.

The development sold about 70 days after being placed on the market. "For a project that big to sell that fast certainly means the market was ready for it," Moore said.

Steve Witten, of New Haven-based Marcus and Millichap, was the broker on the deal. The property was merchant built, he said, meaning the developer had every intention of flipping it for a substantial profit as soon as construction was finished.

The Capstone Building Corp. completed construction of the development in 2006. The property was ranked tenth on the city's 2006 grand list, assessed at $10 million.

"I don't think there is another property in Meriden that is the same quality or appealing to the luxury apartment renter,"' Witten said. "This shows that there is the market for luxury apartments."

Witten believes the current residents will benefit from Rabin|Alexander LLC's long-term interest in the property, creating an added attentiveness that might not have been there before. "This is not a situation where the new owner is going to convert it to condominiums or raise the rents," Witten said.

He characterized the Meriden market as having respectable growth potential for luxury apartment complexes and believes more could spring up in the area. His company is brokering deals for several others in New Haven County, although Witten declined to identify in which communities before closing.

"This says that Meriden has a wonderful market for this type of development." Brennan said.
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