UDR, Inc. (the "Company") (NYSE: UDR), a leading multifamily real estate investment trust, today announced that it has entered into a definitive agreement with the Witkoff Group to acquire 10 Hanover Square, a 493-home apartment community in New York City’s thriving Financial District, for $260.8 million. The purchase price will be funded through the assumption of an existing $192.0 million fixed rate mortgage, the issuance of approximately $64.3 million of operating partnership units (with a floor price of $25 per unit) and approximately $4.5 million in cash.
“The expansion of our portfolio into Manhattan reflects our desire to own and operate apartment homes in markets that have the best growth prospects based on favorable job formation and low home affordability,” said Tom Toomey, president and chief executive officer of UDR. “With total revenue per home of $3,000 per month and only six years following the completion of a major redevelopment, the acquisition of 10 Hanover Square will further enhance the overall quality of our portfolio.”
Located between Water Street and Pearl Street, the 23-story building was formerly the corporate headquarters of both Goldman Sachs and Kidder Peabody prior to being renovated in 2005 to a residential tower offering condominium-style finishes and amenities. The building’s studio, one-, two- and three-bedroom apartments, averaging 708 square feet, feature nine-foot ceilings, open floor plans, granite countertops, maple cabinets and solid oak wood flooring. Residents enjoy 24-hour concierge service, two lounges, a rooftop deck and a discounted membership to Xtreme Gym New York, the 28,000-square-foot on-site fitness center.
10 Hanover Square also contains 41,650 square feet of retail space that is fully leased by Xtreme Gym New York, Fresco on the Go Restaurant, The Original Soupman Restaurant, Apple Bank and Starbucks. The Company estimates the purchase price, excluding retail, at $484,000 per apartment home.“We are extremely pleased to reach an agreement whereby UDR will acquire 10 Hanover Square, a building located in an area that continues to see significant transformation since we began the conversion of the building from vacant office space to a desirable apartment building,” said Steven Witkoff, chief executive officer, of the Witkoff Group. “Our decision to receive nearly all of our equity in the form of operating partnership units in UDR confirms our beliefs in the management team and their ability to create significant long-term value for its shareholders.”