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Princeton Gets Distressed Apt. For $10M, Plans More

Chimneys of Oak Creek2

KETTERING, OH-Princeton Enterprises is one of the apartment complex owners joining the buying frenzy in the multifamily market, including the recent purchase of a distressed 388-unit complex here near south Dayton. This $9.7 million purchase by the Orchard Lake, MI-based firm is one in a string of recent and planned acquisitions.

Column Financial, the failed former real estate arm of Credit Suisse First Boston, purchased the Chimney’s of Oak Creek Apartments here in 2005 as part of a large portfolio buy. Recently, Princeton acquired the 27-acre property from Wells Fargo Bank as trustee for the note holders who took control of the asset through the foreclosure process and the court appointed receiver, Finsilver Friedman Management Corp. The special servicer, Torchlight Investors, negotiated the sale on behalf of the seller. The property is 94% occupied, with rents ranging from $500 to $850 per month.

Princeton CEO Matthew Lester tells GlobeSt.com that his firm is one of the few able to use its financing contacts, and the recent investor frenzy, to make attractive-price purchases of class B assets that are well-located and well-maintained. The company is buying at a good clip, including Willow Way Apartments in College Park, GA in September, and Briar Cliff Woods and Cambridge Woods Apartments in Toledo in October.

His firm has 12,500 apartment units in 65 properties, and Lester tells GlobeSt.com that he can see growth of up to 100 apartment communities or 20,000 units in the next couple of years. “Most of what we’re looking for, about 95%, are classic distressed assets, either bank owned or in a default status, with maybe a receiver in place. Even the ones we haven’t purchased from a receiver show signs of distress, such as significant maintenance issues and a lack of strategy. We can offer deal certainty to a motivated seller,” Lester says.

It’s also a good time to trade up to class A-type properties, he says. “We’re trying to acquire better assets, either newer properties or better locations, paying yesterday’s prices for a better asset,” Lester says.

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