The new owners of four area apartment complexes say they plan to prioritize tenant needs, collaborate with local businesses for new resident perks, and are committed to operating the properties for the long-term rather than flipping them for a profit.
On January 29, Aker Companies closed on an $81 million deal to purchase Kingston Village (formerly Stoney Run) and Kingston Waterfront in Kingston and Lakeshore Villas and Black Creek Apartments in the town of Esopus. Aker’s principals are Will Brocker and Mike Amato, both of Beacon.
“There will be a downstream positive effect for all of our residents with not having issues that were reported on in the past,” said Amato. “We are providing services of full-time management. If someone has an issue, they can call and have a human to talk to. There are people who genuinely care about getting issues solved and improving their quality of life.”
The four apartment complexes were formerly owned by New York City-based E&M Management. A fifth E&M-owned property, Sunset Garden Apartments, was left out of the deal for the reason of “what ultimately came down to price,” according Aker.
How Brocker and Amato made the deal possible
With a large purchase of four communities, Amato and Brocker looked to an investment model that allowed three different entities each to invest about a third. It was made up of their own investors, investors from the online platform CrowdStreet, and investment company Pearlmark. The CrowdStreet investments, which Aker says were made by small business owners, retail store owners, and retirees, among others, ranged from $25,000 to $60,000.
The investors from CrowdStreet are short-term and have the option to exit the investment within a five-year period.
“Since the majority of those invested in the portfolio are interested in the long-term success of these communities, those who decide to move on will likely be replaced with new long-term oriented individuals and/or existing investors increasing their investment to fill the gap,” wrote Aker in an email response.
“We’re long-term holders and this is something we are very passionate about,” said Brocker. “We’re the epitome of long-term holders…We’re not going anywhere.”
New changes on the horizon
Amato said current tenants will not see a “material” rise in their rent cost.
“It’s not even close to being on the radar or something we’d consider doing,” he said.
(In an email, Aker said “very very minimal increases MAY be possible in the future” for existing tenants, but not on the scale of previous sharp increases of 20-40 percent in a single year, like those levied by the previous landlord.)
However, Aker does plan to offer tenants the option to have changes made in their apartments if they are interested or to move to an upgraded unit, both of which would carry rent increases.
Amato and Brocker plan to renovate 70 apartments across the four properties that are currently uninhabitable. The rates for the new units will depend on the market. The first five units leased, without major renovations, ranged from $950 to $1,100.
“We are really excited about having so many apartments come back to the housing stock,” said Amato. “That’s something our team is on-site everyday working on. There’s everything from apartments missing floors, toilets, showers and more. We’re working through each to make them habitable and hopefully help everyone.”
The goal is to create quality “workforce housing,” which they define as “attractive and affordable housing for middle-income workers who participate in the local community.” Amato said the properties were originally built as quality workforce housing, but have suffered over the years due to a lack of investment and care.
“They haven’t had care or investment in the same way it was intended since back when it was built,” said Amato. “The workforce population of today would love to move back to their hometowns of Kingston or Poughkeepsie or Newburgh. They look at the housing stock and a lot of times it hasn’t been touched since the 70s or 80s. For the workforce today, it seems dated and out of touch. We’re excited about revitalizing these communities and providing them the same services that other areas are getting.”
While no rental increases are planned for existing tenants, marketing materials presented to investors alluded to an overall increase of $428 per unit across the portfolio over five years. Brocker said that number is a “very loose guestimate of where we might be, but we have no idea where we will be.”
Amato and Brocker say they have been visiting the properties to speak with tenants about what they’re happy with and changes they’d like to see.
“We want to truly build communities,” said Amato. “It’s about understanding what the community members are looking for. The first step is understanding who is the resident, what do they and don’t they like about the community. We take their priorities and turn them into our own priorities.”
Amato and Brocker plan to take the deal-making ability demonstrated in the purchase of these properties and apply it to community partnerships. For example, they recently entered into an agreement with Hudson Harvest, “a local food distributor bringing sustainable and source-transparent products year-round” based in Hastings on Hudson, that will provide residents with preferred pricing and fresh groceries to their doorsteps.
Another idea that has been bounced around is constructing a spur connecting a nearby Scenic Hudson park to the at Lakeshore Villas property.
They’ve also considered new amenities across the properties like a dog park, which was a suggestion from one of the tenants.
Brocker also said they are working with the city of Kingston to come up with a creative solution to preserve workforce affordability across the apartment complexes without the use of tax breaks. He said he could be more specific about the details until the agreement is finished.
“The city has been extremely excited,” said Brocker. “They are excited to have owners who care about the properties.”
Right now, they are continuing to look for other local community partnerships.
“We’re going to be programming events for our community members to increase engagement, which can help businesses to get exposure to a large group of residents and it is an amenity to the people who live here,” said Amato. “Calling all local businesses, please reach out. We’d love to partner with them.”
During the spring and summer, as long as Covid-19 numbers are low, they plan to hold community events, including food trucks on site, holding guided hikes, live music, and raffling off gift cards to local businesses.
This article was updated March 4 following a note from Aker to clarify that existing tenants may see some “minimal” rent increases in the future. A previous version stated simply that existing tenants would not see rental increases, with wording that could have suggested rents would never increase.