Developer Embraces Cryptocurrency With NJ Multifamily Projects
Prime City Ventures has acquired two New Jersey properties in federal opportunity zones for multifamily developments that incorporate cryptocurrency, Commercial Observer has learned.
The developer, which is affiliated with New Jersey multifamily property owner McGee Ryan Assets, is building a 60-unit apartment complex on a one-acre vacant city-owned parcel in Orange, N.J. — with an estimated finished value of $27 million — that will accept crypto payments for monthly rent. The firm also purchased another opportunity zone property with plans for a 30-unit multifamily development in Long Branch, N.J. through funds raised from cryptocurrency investments.
“We plan to be the bridge between crypto and real estate and use these two deals to prove that it is a viable option to finance and stabilize a ground-up construction project,” Alex McGee, co-founder of Prime City, told CO.
The Orange property, located at 595 Lincoln Avenue, was bought at a discounted $1.2 million all-cash transaction as part of a redevelopment deal with the city of Orange. McGee said it took about a year to negotiate the deal with Orange city officials. The site, which is situated near Seton Hall University, was formerly occupied by the Orange Police Department and a 1901-built school but has been vacant for 30 years.
McGee said he hopes to complete the development in spring 2023. Tenants will have the option to submit rent payments via cryptocurrencies Bitcoin and Ethereum.
An industrial building currently sits at the second opportunity zone investment site, at 20 Third Avenue in Long Branch, N.J. Prime City acquired the site for $1.6 million — raised in cryptocurrency— from an undisclosed seller. McGee said Prime City will be obtaining a construction loan and additional equity for the 30,000 square-foot project from a cryptocurrency platform it plans to roll out by the end of 2021. He is targeting an early 2023 project completion and will accept crypto payments for monthly rent.
“I really believe in cryptocurrency and I believe that its applications to real estate are huge,” McGee said. “It is a good test case of raising money to fund the deal using cryptocurrency and also tenants paying using cryptocurrency.”
Andrew Coen can be reached at firstname.lastname@example.org.