Hyperion Group has teamed up with an experienced New York real estate investor to purchase a New Jersey rental building whose owners were struggling to refinance CMBS loans.
HyperionMFP Partners, a joint venture between the New York and South Florida-based investment and development firm and Lawrence Benenson of Benenson Capital Partners, purchased The Center, a 314-unit luxury rental building in Cliffside Park, New Jersey, for $165 million in an off-market deal.
“We were attracted to the property and it was a good opportunity given the market conditions,” said Rob Vecsler of Hyperion.
Completed in 2017, The Center is located in the heart of Cliffside Park’s business district and features 50,000 square feet of retail. The seller, Arilex Realty, controlled by Arianne Schreer and Alexis Pizzurro – daughters of veteran Gold Coast developer James Demetrakis – financed the building with a $130 million CMBS loan after paying off a bridge loan from TPG Real Estate Finance in 2017.
The property has maintained an occupancy rate above 90 percent and is generating cash flow that is stronger than initial expectations, with a debt service coverage ratio of 2.4, according to Morningstar. As of July, the building was 97 percent occupied, with an average rent of $3,200 per Trepp.
But when the CMBS debt matured in July 2024, Arilex was unable to refinance. A two-month forbearance expired in early September, and the loan’s special servicer began adjustment talks as higher interest rates put pressure on valuations and credit conditions.
At a recent appraisal, the property was valued at $161.1 million, about 14 percent lower than the $188 million valuation when the mortgage was originated.
The sale effectively resolves the debt problem and gives the new company a foothold in one of the strongest rental markets in northern New Jersey. Vecsler said it will focus on similar opportunities in the Tristate region and South Florida, where it sees opportunities for rental growth and asset appreciation.
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