BNE Real Estate Group secured a $103 million loan to refinance a newly constructed 245-unit luxury rental property in Chatham, New Jersey.
Northwestern Mutual provided the 10-year, fixed-rate loan for the six-story development at 2 River Road.
The financing environment has been challenging, but in this case BNE had no shortage of options, according to the JLL Capital Markets team led by Michael Klein and Thomas Didio Jr. that facilitated the deal.
“The significant amount of interest from lenders prior to the property’s stabilization is a testament to the quality of the product, highly desirable location and strength of the sponsor,” Klein said in a statement.
Chatham is among the richest localities in Morris County, which is among the 15 wealthiest counties in the U.S. by median household income, according to U.S. Census Bureau data. BNE’s project is in Chatham Borough, which is bordered by Chatham Township and the city of Summit and has a median household income of $209,000.
The median asking price for Morris County homes reached $625,000 in April, up 17.4 percent from the same time last year, according to Redfin data. But amenity-laden apartment complexes are relatively rare, limiting the choices for homeowners looking to downsize or young adults not ready to buy or not interested in the lifestyle of single-family housing.
The suburban borough of Chatham offers buyers high-performing schools and convenient commutes to Manhattan, but few multifamily developments, in large part because of restrictive zoning.
“The only project that’s really anything comparable is in the town next door in Short Hills,” said Jonathan Schwartz, a principal at BNE Real Estate Group. “But other than that, it’s really the first class A, new project built in many, many years.”
The River Road development site is on underutilized, formerly industrial land. The borough council made it possible by creating a special overlay district through a comprehensive planning process that began in 2018.
The Livingston-based firm opened the property to leasing last December. Nearly 65 percent of the units are now leased, according to Schwartz. Renters tend to be empty nesters looking to downsize or young people angling to settle down in the area.
The final development was larger than originally planned, according to Real Estate NJ. Its footprint grew from one acre to five through a series of acquisitions.
The BNE development, designed by Minno & Wasko Architects and Planners, offers one- to three-bedroom units and has a pet spa, 24/7 concierge and other amenities. Rents range from $3,195 to $5,900.
BNE Real Estate Group has opened several luxury multifamily developments across New Jersey in recent years, including in West Orange and South Amboy.
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