Arbor, ArborCrowd Team Up to Finance Multifamily Property Acquisition in $26M Deal

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NKF Capital Markets has arranged a $19.5 million loan plus a $3.55 million equity investment for CS Acquisition Group’s purchase of Cove West Hartford, a 200-unit apartment community in West Hartford, Conn., Commercial Observer has learned. Arbor Commercial Mortgage and ArborCrowd provided the debt and equity, respectively.

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The property was acquired by New Jersey-based CS Acquisition Group, an ArborCrowd affiliate and AMAC—a private equity firm that’s part of the Arbor family of companies—for $20.85 million last month. The deal’s total capitalization is $26.3 million, with CS Acquisition Group and AMAC continuing to own more than 50 percent of its total equity.

NKF Capital Markets’ Dustin StollyJordan Roeschlaub and Daniel Fromm negotiated the financing.

“It was a pleasure working with CS Acquisitions to facilitate the acquisition of Cove West Hartford,” Stolly said in prepared remarks. “This property is ideally located near main transportation hubs, which represent part of the growing appeal of this neighborhood.”

The six-building complex, located 2.5 miles from Downtown Hartford at 106 Kane Street, will undergo a $3.6 million gut renovation, including an overhaul of the property’s common areas and 12,000-square-foot clubhouse. One-bedrooms currently rent for $900 per month, and two-bedroom apartments start at $1,250 per month, according to Hotpads.com.

It is anticipated that the repositioning will generate an average rental premium of $330 per unit per month, according to information from ArborCrowd, and the investment has a projected 14 percent to 17 percent internal rate of return for the crowdfunding platform’s investors.

“We’re highly selective about the deals we present to our investors. Each sponsor and project is thoroughly vetted to ensure the deal and projected business plan match up with market fundamentals and demand,” said Adam Kaufman, a co-founder of ArborCrowd, in prepared remarks. “Like all of our deals, this investment was sourced through our relationship with the Arbor family of companies, which provides us access to a proprietary network of successful sponsors.”

The Cove West Hartford transaction is the seventh multifamily deal that ArborCrowd has presented to its crowd investors since its founding in 2016. 

Kaufman added: “Cove West Hartford was a particularly attractive investment opportunity for several reasons, including its outstanding location near downtown Hartford and local employment centers, a lack of comparable supply in the market, and strong demand for quality apartments at an affordable price. We’re excited to partner with CS Acquisition Group, an experienced local owner and operator, and are confident that they will execute on the value-add strategy, which could yield a substantial return on investment.”

The property joins CS Acquisition Group’s existing Hartford portfolio, which includes multifamily assets at 15 Evergreen Avenue, 61 Willard Street and 100 Benton Street.

“This property is a great addition to CS Acquisition’s portfolio. It is centrally-located, providing a significant nexus for residents to local major retail centers and universities,” Fromm said. “We look forward to seeing this asset continue to add to the transformation of Downtown Hartford.”

Officials at Arbor Realty Trust weren’t immediately available for comment. Officials at CS Acquisition Group could’t immediately be reached.