The Twin Towers apartment complex, a 252-unit elderly affordable community in Bridgeport, recently was purchased for $10 million.
As investors diversify their portfolios with elderly housing towers in Bridgeport, affordable housing is proving to be a viable investment alternative to the sometimes fickle Class A market.
CB Richard Ellis/Whittier Partners, a New England-based, full-service commercial real estate services firm, recently brokered the sale of the 252-unit Twin Towers apartment complex in Bridgeport to Bridgeport Towers LLC for $10 million, or $39,683 per unit.
Simon Butler and Biria St. John of the Boston office of CB Richard Ellis and Mike Stone of the Hartford office of CB Richard Ellis represented the seller, Denver-based AIMCO Properties, and procured the buyer in the transaction.
Twin Towers is a 252-unit elderly affordable community located at 199 Yacht St. in Bridgeport. The property consists of two seven-story apartment buildings that were redeveloped in 1980 and have views of the coastline.
The property is located just south of Interstate 95, overlooking the Captain’s Cove Yacht Club and adjacent to the Black Rock neighborhood of Bridgeport near the Fairfield town line.
The building is age-restricted, and residents must be either six months past their 62nd birthday or older, or have a proven disability in order to live there. The entire property is under a Section 8 contract, which basically involves housing assistance payments, often referred to as a HAP contract.
“Essentially the government pays the rent. Residents have to pay 30 percent of their income toward rent, but they’re otherwise guaranteed by [the Department of Housing and Urban Development],” said St. John.
“This property is fairly unique in that Bridgeport is very much a blue-collar, poorer community compared to the rest of the county,” he added. “This building is in the nicer, Black Rock section of Bridgeport, right on the edge of the neighborhood and bordering the Fairfield town line. They’re right on the water and adjacent to a yacht club, so it’s a nice self-contained community.”
Opening Doors
Prior to the Twin Towers transaction the building had been undergoing some capital upgrades to the infrastructure, but according to St. John, it was in good condition. The new owner, Bridgeport Towers LLC, is an investor group led by Israel Schor. The group is investing Israeli money in the East Coast. With several major holdings started in Brooklyn, N.Y., the group is working its way north.
According to St. John, the property had been on the market for approximately three months.
“It took some time to close because it was going through renegotiations of its Section 8 contract,” he said, noting that HUD’s Office of Multi-Family Housing Assistance Restructuring was involved. St. John explained that OMHAR was basically restructuring the existing contract in order to have rents updated in light of the current market rates.
There are quite a few subsidized housing complexes in Bridgeport, said St. John, but the Twin Towers deal was a reasonably sizeable transaction for the coastal city.
“I’m not sure it was the largest, but it should be up there with the largest, at least in the last five years,” he said. “There are few opportunities for this type of property, and a lot of buyers are looking for this sort of investment. We have a lot of experience with these subsidized units. A lot of nonprofit and traditional investors are looking to preserve the properties or diversify their portfolios.”
The Bridgeport housing stock is fairly old, but a lot of what is there is affordable housing. Accordingly, the affordable market has held up very well.
“These are renters by necessity that don’t have cash for a down payment to purchase a home. So these properties are filling a need,” said St. John. “Generally our experience has been that more blue-collar communities have seen greater stability than those higher-tech properties chasing affluent renters.”
He continued, “Investors have recognized this trend and it has opened doors for them to look into places like Bridgeport to invest, rather than go after the Class A communities.”
St. John added that often a property such as Twin Towers could generate a more stable yield on investment than a high-end apartment where the market may be more fickle.
CB Richard Ellis’ North East Multi-Housing Team has now completed sales in excess of $350 million in the past 36 months in Massachusetts, Connecticut, Rhode Island, New York and New Hampshire.
CB Richard Ellis/Whittier Partners is a Boston-based joint venture of CB Richard Ellis and Whittier Partners Group with offices in Massachusetts, Connecticut, Rhode Island, Maine and New Hampshire. The firm is a large provider of leasing, property management, appraisal/valuation, retail, corporate advisory and investment services.
