Deal Size
$66.0M
Cap Rate
Est. 5.04%
$/SF
—
$/Unit
$325,123
Occupancy
—
The Port Chester Multifamily Project presents a strong investment opportunity with a cap rate of 5.04%, which is competitive for the Westchester market. The project includes 203 units, with 10% designated for affordable housing, catering to a diverse tenant profile. The proximity to Metro-North's Port Chester station enhances its appeal, providing direct access to Manhattan, which is a significant driver for demand in this suburban market. Given the strong demand for multifamily housing in supply-constrained areas, this investment aligns well with our strategy.
Hudson Companies is pursuing a core-plus investment strategy, focusing on well-located, fully entitled multifamily developments in transit-oriented markets. Their track record in Westchester County indicates confidence in the area's growth potential and demand for high-quality housing.
This deal reflects a strong institutional interest in multifamily assets in suburban markets, particularly those with transit access. The pricing suggests a continued recovery and confidence in the multifamily sector post-COVID, indicating a favorable outlook for similar investments.
$66.0M
Truist Bank
Port Chester is experiencing positive demographic trends, including population growth and increasing income levels. The area is attractive for families and young professionals seeking affordable housing options close to New York City, which is evident from the ongoing developments in the region.
The competitive set includes several multifamily developments in Port Chester, with recent projects indicating a strong demand for housing. The presence of mixed-use developments and retail spaces in the downtown area further enhances the attractiveness of the location.
The supply pipeline is limited, with few new multifamily projects under construction. The Port Chester market is characterized by a constrained supply, which is expected to support rental growth and occupancy rates in the coming years.
The cap rate of 5.04% is slightly below the average cap rates for multifamily properties in Westchester County, which typically range from 5.5% to 6.5%. This lower cap rate suggests a strong demand for well-located assets in transit-oriented markets, indicating a lower risk profile for this investment.
Given the strong demand for housing and the limited supply in Port Chester, we anticipate steady rent growth. Recent trends indicate that asking rents have been increasing, reflecting the area's appeal to commuters and families.
The project includes a mix of market-rate and affordable units, providing a unique value proposition. The ground-floor retail space, already leased to Human Development Services of Westchester, adds an additional revenue stream and enhances the community aspect of the development.
With the project still in the construction phase, there is minimal rollover risk at this stage. However, the future tenant mix will need to be carefully managed to ensure a balanced rent roll.
The tenant mix will include both market-rate and affordable housing, reducing single-tenant risk. The presence of a retail tenant on the ground floor will also diversify income sources.
Construction delays or cost overruns
HighImplement a robust project management framework and engage experienced contractors to minimize risks associated with construction timelines and budget adherence.
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“And last week, we made an announcement of a new proposed rule in Champagne, Illinois, that HUD would give allowance to public housing authorities and owners to require those that are receiving housing...”
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