The Newark based real estate company TreeTop Development is staking a claim on the New York market with its acquisition last week of a four-property portfolio of mixed use buildings.
The company — which has owned and managed over 3,000 residential homes throughout New York and New Jersey — partnered with New York City-based Latus Partners, LLC, on the deal that includes 1917 7th Avenue, 110 St. Nicholas Avenue, 110 West 116th Street and 120 West 116th Street.
“We’ve initiated an aggressive plan over the past two years to grow our portfolio of homes by purchasing high quality properties in key markets in the New York metropolitan area and these properties fit perfectly in with our investment strategy,” said Adam Mermelstein, co-founder and principal of Treetop along with childhood pal Azi Mandel.
TreeTop will institute a capital improvement program to renovate the buildings and bring the properties up to market standards. The company will renovate apartment interiors as they turnover to include new hardwood flooring, renovated kitchens and renovated bathrooms.
The transaction is the first of several large portfolio-type deals TreeTop is planning in New York City to significantly increase its presence throughout Manhattan in 2012, according to Mermelstein who, along with Mandel has crafted a strategic path for TreeTop Development.
Sensing a shift in the real estate marketplace, the company has implemented an aggressive approach to acquire and transform value-laden properties in the area’s premium locations and take advantage of niche markets.
The vision and insight of the company’s principals have enabled TreeTop Development to grow its portfolio of homes at a time when many property owners have slowed pursuing multi-family investments.
“The strength of Treetop Development has always been our progressive approach to residential investment and development,” said Mandel. “We are constantly seeking out new and challenging projects that will become signatures for surrounding communities. We’re determined to think out of the box.”
The story of TreeTop Development can be traced back to two high school friends who combined compatible business philosophies to create a development company committed to innovative ideas.
Azi Mandel launched his career in the fall of 2001 by accepting a position with a Manhattan syndicate led by Marc Karasick — a well-known real estate investor who has owned such trophy buildings as the Bank of America Building in San Francisco.
Adam Mermelstein jumped right into the real estate investment field after graduating Yeshiva University in 2001 by buying and flipping rental buildings.
Their paths would cross again when Mandel, while overseeing a complicated deals that included the acquisition, renovation and re-launching of commercial and residential properties throughout New York City, would occasionally be presented with opportunities that he felt weren’t right for the syndicate.
For these transactions, he would call his old high school friend, Adam, whom he knew was aggressively seeking new deals. It wasn’t long before the two began working together.
“We never thought we would start our own company,” recalled Mermelstein, “but we got along very well together and both had very similar business views. After our first couple of joint projects, we decided to launch TreeTop Development in June, 2005. Our plan was to start slowly, but before we knew it, we had seven projects underway.”
In early 2007, sensing instability in the condo market, TreeTop Development made a critical decision that would give them an advantage in the area’s marketplace.
The company would begin utilizing innovative acquisition techniques such as purchasing market-rate and high-performing HUD subsidized rental properties. TreeTop would then transform the properties by modernizing living spaces, common areas and building systems. The end result was an expansion of its portfolio in key strategic markets, including more than 2,000 units in Essex County, NJ.
“Economic concerns and challenges over the past few years have certainly created new opportunities in the real estate industry for multi-family property owners and investors,” said Mermelstein.
“Purchasing high-quality HUD apartment assets is one of these avenues that has enabled us to grow our company. Additionally, we focus on buying well-located, market-rate rental communities at competitive prices that immediately generate capital and possess future upside as well.”
Buoyed by the success of this new HUD strategy, TreeTop began a strong push into new markets, turning its eye to value-laden multifamily rental properties with favorable rents in strategic middle-class northern Manhattan neighborhoods.
The aggressive pursuit of new properties in stable Upper West Side locations has TreeTop in contract for 350 units at the start of 2012 with the possibility of another 500 apartment homes added to its portfolio by year’s end.
Shimon Shkury & Victor Sozio of Ariel Property Advisors served as broker for both the buyer and seller in the 1917 7th Avenue portfolio deal. Steve Fleissig of Greenberg Traurig LLP acted as legal counsel for the buyer.
