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The Real Reporter December 23 , 2010

by Joe Clements


ARLINGTON — Hamilton Co. President Carl A. Valeri credits insider information for winning the Brattle Realty Portfolio of 317 apartments with a $41.2 million bid, but there is nothing nefarious in the deft dealings steeling his Allston-based firm to outmaneuver competitors chasing the prized portfolio of infill properties that run down the Massachusetts Avenue corridor into Cambridge. Instead, the aggressive pursuit that included nailing down the 20- building package sans contingencies was wizened insight culled from Arlington native Valeri having once worked on the properties for a construction firm owned by his father, an elementary school friend of the homegrown developer.


“It was a huge strategic advantage for us,” Valeri says upon landing the prize in a major deal that theealreporter.com initially unveiled earlier this month. Specializing in masonry work during his formative years, Valeri says he remained confident about the upkeep of the Brattle Realty Portfolio even after matriculating across the Charles River to head up one of New England’s leading property groups, with the Hamilton Co. now approaching 5,000 residential units under its control. “They are in excellent condition,” Valeri says of the buildings constructed mostly in the 1960s and early 1970s. All are in Arlington except for a 58-unit asset at 9 and 15 Chester St. in Cambridge.

Helping Hamilton founder Harold Brown oversee the empire that was launched in 1954, Valeri says he has kept an eye on the buildings where he once toiled, and when they came available was confident enough to make the pre-emptive strike before others could get a handle on the quality level, one he insists rivals new product thanks to a dedicated management team that will be kept on board. Many had worked with Valeri during his Arlington days and demonstrated a proclivity for precise, preventive upkeep. "It’s an excellent portfolio for Arlington, or anywhere", he says. Appropriately, the entity buying the holdings is named Nostalgia Properties LLC.

 

Valeri credits his lender and legal advisors, a team led by Sally E. Michael of Dionne & Gass, for helping assemble the winning package, one that included a $28.7 million loan from Sovereign Bank. The debt source played a critical role, stresses Valeri, praising veteran loan officer George Brockman for confidence in both the sponsor and the underlying assets enough to craft the financing during a still-shaky economy. Besides willing competitors chomping for a chance to take the portfolio, rising interest rates also made time of the essence. “That really helped to have Sovereign Bank believe in us that what we said was going to be the case and let us get this done,” says Valeri. “It’s clear to me that they are in the business to do business; I was very pleased by the outcome.”

The Arlington package listed by Cushman & Wakefield generated plenty of eager traffic, acknowledges Executive Director Simon Butler, who negotiated the sale along with colleague Biria St. John, Christopher Sower and Michael Byrne. In the midst of a mind-numbing series of multifamily closings by C&W’s Apartment Brokerage Group that this past week exceeded $200 million including the Brattle listing, Butler says Brown and Valeri have been “astute” investors who have beaten out some of the country’s leading multifamily concerns. Just last year, Hamilton emerged victorious in buying Dexter Park in Brookline, a 409-unit luxury apartment building that traded for $129.5 million. “They don’t pursue a ton of deals, but when they decide to, they do their homework and are very enthusiastic going after it,” says Butler, who has negotiated four trades with Brown’s firm, including Dexter Park.

The Arlington buildings include the 117- unit Brattle Drive, consisting of three-story brick structures in an eight-building complex located next to the popular Minuteman Bike Trail. The tallest is 385 Massachusetts Ave., an eight-story, 71 –unit structure. Others include 898 Massachusetts Ave., a five-story, 33-unit property constructed in 1963; plus 11 Allen St. and 333 Massachusetts Ave., a pair of three-story brick buildings totaling 22 apartments. One development at 50 and 54 Grove St. will undergo capital improvements to the façade and landscaping upgrades, says Valeri, and the firm hopes to institute computerized administration systems and other new technology to assist tenants. The overall physical plant, however, “is impeccable,” he says, adding, “We just want to ensure the tenants that we will continue to provide the same level of service they have been used to.”

As for C&W, Butler estimates that the Apartment Brokerage Group is on track to close on $617 million of product by yearend. That figure became nearer to reality on Wednesday when the team completed the sale of a Rhode Island portfolio of 708 affordable units for $54.8 million. The 10- building offering was similar to an $108 million trade C&W tendered in Massachusetts this week on behalf of Equity Residential. That 931-unit Bay State portfolio also consists of affordable units in 10 buildings, and was acquired by the same buyer, an affiliate of Rhode Island-based Providence Realty Investment. “We’ve had a good year,” concurs Butler, who declined to discuss other competitors chasing the Brattle Realty Portfolio. Seller Brattle Realty Trust received legal counsel in trading the portfolio from Nixon Peabody LLP.

 

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