NYCB, Harbor Group International Lend $82M on NJ Rental Acquisition

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Khosla Capital and partner DKJ Equity have locked in a $81.9 million financing package from New York Community Bank (NYCB) and Harbor Group International (HGI) to buy a multifamily property called The Sheffield at Englewood South in Englewood, N.J., Commercial Observer has learned. 

NYCB provided $73.8 million in senior mortgage in the deal, while HGI contributed $8 million in mezzanine financing, sources said. The 10-year debt package was extended to the borrowers at an 83 percent loan-to-cost ratio, indicating a purchase price of almost $99 million. 

SEE ALSO: Harbor Group Sells Pompano Beach Apartment Complex for $96M

Sources said The S.Hekemian Group was the seller of the property. Company officials did not respond to an inquiry prior to publication. 

Meridian Capital Group’s Zev Karpel and Judah Hammer negotiated the transaction. 

The 252-unit elevator property is located at 100 Sterling Boulevard in Englewood, a town north of Hoboken and near Hackensack that is about 15 miles from Midtown Manhattan. Its unit mix includes 49 one-bedrooms and 203 two-bedrooms that average 1,118 square feet. 

“Given the vintage of the asset and its excellent Route 4 East location, the combination of strong real estate fundamentals and superb capital structure are sure to complement the sponsors’ deep managerial experience,” Karpel said.

The Sheffield features a fitness center with yoga and meditation rooms, an outdoor pool and hot tub, a lounge with a fireplace, a theater, a business center with a conference room, a children’s play area and bicycle racks, among other amenities. 

“We are excited to acquire an institutional-quality asset in one of Bergen County’s premier locations,” said Raman Khosla, the founder and CEO of Khosla Capital. “We look forward to continuing to improve the property; enhancing the living experience for our residents and creating value for our investors.”

Earlier this year, Khosla Capital — also in partnership with DKJ Equity — made its first-ever acquisition. Khosla and DKJ bought Prospect Place, a luxury apartment complex in Hackensack, from Kushner Companies, for $114.5 million, as CO previously reported. That deal, which closed in the spring, was also facilitated by a loan package from NYCB and HGI and was aided by Meridian’s Karpel and Hammer, who advised the buyers in that deal as well. 

Mack Burke can be reached at mburke@commercialobserver.com