Singapore’s largest private bank found the best place to sink $41.65 million—a financially troubled apartment complex in Westville.
Wintergreen of Westville, a 294-unit housing development at 400 Blake St., sold on Sept. 25 to UOB Eagle Rock Multifamily Property Fund LP for $41.65 million, or nearly $142,000 per unit.
The new owner is a private equity fund run by a Long Island real estate company and United Overseas Bank (UOB), Singapore’s largest private bank. The fund focuses on investments in “U.S. suburban multi-family housing communities.” It has bought two other apartment complexes in the past two months in Connecticut—Beacon Mill Village, a converted textile mill in Beacon Falls, and Britannia Commons, a converted schoolhouse in Meriden.
The company was attracted to the Westville complex for its “great tenant base,” the “quaint downtown,” and the “local pride” of the neighborhood, said UOB Eagle Rock Multifamily Property Fund LP partner Rishi Gupta. “We really like the community.”
Wintergreen, a gated community of five apartment towers, was built in 2007 at an old factory site in the shadow of West Rock. Its sale was the largest sale of a residential complex in the state this year, by total sale price, according to Steve Witten of Institutional Property Advisors, the brokers on the deal.
Local boosters welcomed the news.
“I was surprised at how strong the interest was and what it sold for,” said Erik Johnson, head of the Livable City Initiative, the city’s anti-blight agency. “It’s just evidence of how strong the market is. At a time when there is not a lot of confidence in other markets, there is confidence in this market from outside New Haven.”
“People wouldn’t invest if they didn’t think they could get a return on their investment,” Johnson noted. He said he has seen a change “from individual to institutional investors deciding to put their capital in play in the city.”
The new landlord pledges to bring stability to the complex after it fell into rocky financial footing.
Virginia-based developer and owner, Metropolitan Development raised some eyebrows several years ago when it announced it would build a nearly 300-unit complex near the heart of Westville.
“There was a lot of concern in the neighborhood” when the complex was built, recalled Chris Heitmann, director of the Westville Village Renaissance Alliance. Neighbors wondered if there was enough demand for housing to fill it.
The project was a reach for the developer, Johnson said. Metropolitan Development “didn’t have a footprint in Connecticut or the Northeast. They tried to do something that wasn’t in their building model.”
Metropolitan Development took out a $50 million loan to finance the project. In March of 2011, U.S. Bank filed for foreclosure. Later that year, in December 2011, Metropolitan Development lost the property to foreclosure, land records show.
The property changed hands twice before UOB Eagle Rock snatched it up from SA Wintergreen LLC. The new owners plan to stick around and manage the property, Gupta said. They’ll do so through Eagle Rock Management, the Long Island-based management company that partnered with UOB to create the private equity fund. Gupta said the name of the complex will stay the same for now, though Eagle Rock typically rebrands its apartment complexes after acquiring them. Gupta didn’t say if rents would change: “Any owner would want to have higher rents, but you have to be wary of what’s acceptable by the market.”
Gupta said despite the foreclosure action, the complex remains “fairly well occupied” (he declined give a percentage). Three-quarters of the apartments are two-bedrooms; the rest are one- and three-bedroom, according to property manager Sandra Vescera. The average apartment size is 1,100 square feet. The complex offers 586 parking spots, most of them on the ground level beneath the apartment towers.
Vescera, who’s worked at Wintergreen for five years, is one of three office staff and five maintenance workers that had worked for the past management company, Riverstone Residential Group. They all got to keep their jobs. Now they work directly for the landlord.
On Monday afternoon, some of those workers were busy applying fresh white paint to an apartment that had been recently vacated. The paint job amounted to routine maintenance, according to the workers.
“Sparse” Inner Sanctum
Gupta said his company has bigger improvements in store, particularly for the vast inner courtyard that spans the five apartment buildings.
“Right now when you go to the community, it feels a little sparse—it feels a little institutional,” Gupta said. The courtyard is basically empty except for a small building that houses a gym, two grills, and a table with a bare trellis overhead. His company aims to make the space more “child-friendly.” Possible improvements include a children’s play area, some gazebos, a fire pit, and more benches, Gupta said.
A nearby pizza shop, whose bright signage blares from a small strip mall tucked into the complex, was never part of Wintergreen, Gupta said. The owners refused to sell the property when Wintergreen was built.
Around Wintergreen Monday, tenants offered several suggestions for ways to improve their home.
How about a pool? offered Abdullah Muhawish (at left in photo with roommate Khalid Almalki). Like many tenants at Wintergreen, Muhawish and Almalki are college students. They study at the University of New Haven, across the border in West Haven.
UNH runs shuttles every 40 minutes between Wintergreen and UNH. A shuttle driver pulled up to the site Monday afternoon and picked up two students. He said he typically ferries 20 to 40 students per day between campus and the housing complex.
Muhawish said the complex is quiet and the apartment is in good shape. He had two complaints: he gets terrible cell phone coverage inside the fortress of Wintergreen. And “the whole complex is designed for rich people.” The price—$1,900 for three bedrooms, but no pool and an insufficient gym—is too high, he opined.
Gupta said UOB Eagle Rock will take all feedback into consideration. He doesn’t know whether the courtyard could hold a swimming pool: “That’s one of the things we’re going to research.”
A Haven For Students
Another tenant cited a long-running concern about the building: It’s too much like a student dorm.
The tenant, who declined to give his name, said the apartment was “nice and quiet when we moved in” two years ago. But now, he said, “there’s a lot of students here. They make a lot of parties, a lot of noise.” His neighbors throw parties even on Monday, Tuesday and Wednesday, he said. He said he and his wife, a doctor, are looking forward to moving out within the year.
Whether Wintergreen would turn into a college dorm was a top neighborhood concern when the project got going. The developer got city permission to build the complex in 2007 on the grave of an old factory by promising upscale apartments for adults. The promise was never legally binding. Instead the complex became known to some as “Animal House.” In a particularly rowdy incident in 2009, a student split his head open during a fight.
Heitmann, of the Westville Village Renaissance Alliance, said the complex’s party scene appears to have died down since those days. The management is doing a better job, he said, and the number of students has dwindled.
Between 20 and 30 percent of current tenants are college students, according to Gupta. Most of them study at UNH or Southern Connecticut State University. Gupta said under fair housing law, “you can’t turn away a student just because they’re a student.”
He expressed interest in making the complex more appealing to the non-student crowd: “Our particular view of the property is it lends itself very well to young families, young professionals, who want to have a great place to live.”
Not all students are rowdy. Waleed Ahmed and Alaa Alsayed, a married couple from Saudi Arabia, are expecting their first child later this month. They moved to Wintergreen from Knoxville, Tenn. to pursue college scholarships. Right now the couple is studying English at UNH to prepare to enroll at Quinnipiac University. They said the complex falls short of similar housing they got used to in Knoxville—in part because there’s no pool—but it’s quiet and safe.
Mohammed Mubarki (pictured), 27, a Wintergreener who studies electrical engineering at UNH, was waiting for a ride at the complex’s driveway Monday. He also hails from Saudi Arabia. He said word has spread among international students that Wintergreen is the place to be.
“There are a lot of Saudis” at Wintergreen, he said. “We come here because of the safety.”
Mubarki said before moving to the area, he checked out a web page from current international students at UNH offering advice to future students. “They told us this is one of the best places here,” he said. Mubarki, who shares a three-bedroom apartment for $1,800, said the advice was OK. One of the rooms is smaller than the others, but “it’s OK,” he said. He said his building is quiet, though some others are louder.
Gupta said the new landlord will consider all feedback from tenants and neighbors as it develops plans for its newest property.
As to the complaints about loud student parties, he said the noise “is just a function of having young professionals or students.” He said there are ways to structure leases to encourage more long-term tenants, instead of short-term partiers, but his company has not yet formulated its leasing strategy.
“We’re still getting our hands around the property. It’s a big property,” he said.
WVRA’s Heitmann welcomed the new landlord to town. Though the landlord is from out of state, Heitmann said he was pleased to see the company has two other investments in the state.
“It’s more local ownership than previously,” Heitmann said. “It sounds like a good group. We’re excited to meet with them and work with them.”