Lone Star Funds, which just sold a $1.1 billion portfolio of garden apartments to Kushner Companies, just sold another group of properties on Long Island for nearly $500 million.
Fairfield Properties and Maryland-based real estate investor FCP paid $472.5 million to purchase the seven-property portfolio spanning 1,496 units, the buyers told The Real Deal.
“The locations fit perfectly into our portfolio,” Fairfield managing partners Gary Broxmeyer and Michael Broxmeyer said in a joint statement, adding that they’ll be working to upgrade the properties and integrate them into the company’s platform. The company says its the largest multifamily owner in Nassau and Suffolk counties.
FCP contributed a $100 million preferred equity investment toward the deal, which company senior vice president E.J. Corwin said is FCP’s first investment on Long Island.
Fairfield plans to make improvements to the properties, such as upgrading common areas and finishes inside apartments throughout the portfolio.
Lone Star acquired the portfolio in 2015 as part of its $7.6 billion purchase of Home Properties and its 108 apartment communities that included more than 36,000 units, according to property records and previous reports.
“There was incredible interest in the properties, as this class of ‘workforce housing’ is in high demand because of a shortage of quality Class B apartments and the slow pace of new construction on Long Island, said CBRE’s Jeffrey Dune, who worked as part of a team that marketed the Long Island properties on behalf of Lone Star.
A representative for Lone Star could not be immediately reached for comment.
The Dallas-based company last year put a block of 33 properties along the East Coast on the market, and has sold about $2.5 billion worth of properties, according to Real Estate Alert.
Lone Star last week sold a portfolio of 6,000 rental apartments in Maryland and Virginia to Kushner Companies, which marks the Kushner’s largest acquisition since the company paid a record $1.8 billion for 666 Fifth Avenue more than a decade ago.
The seven Long Island apartment communities were constructed between the early 1950s and mid 1970s.
In Nassau County, the communities are the Westwood Village in Westbury (242 units), Heritage Square in East Meadow (80 units) and Cambridge Village and Yorkshire Village in Levittown, with a combined 122 units. The Suffolk County communities are the Southern Meadows complex in Bayport (542 units), Lake Grove Apartments in Lake Grove (368 units) and the Mid-Island Apartments in Bay Shore (232 units).
CBRE’s Gene Pride, Eric Apfel and Alexander Virtue worked on the team that negotiated the sale.