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N.Y. firm buys Claymont apartments for $51.5M

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The Edge at Greentree, a 286-unit community in Claymont, was recently acquired by a New York-based investment firm. | DBT PHOTO BY MIKE ROCHELEAU

CLAYMONT – A New York real estate investment firm has acquired The Edge at Greentree apartments in a $51.5 million deal, the largest multi-family sale this year in Delaware and one of the largest single commercial transactions in recent years, according to county land records.

The 286-unit apartment building off Naamans Road near the Interstate 95 interchange was acquired by a limited liability company connected to Yellowstone Property Group of Pomona, N.Y. Led by principals Hillel Markowitz and Stuart Zelmanovitz, Yellowstone has a considerable number of holdings in Connecticut as well as others in Massachusetts, New Hampshire, Indiana, and Pennsylvania, but this is their first investment in Delaware. The firm is a vertically integrated owner and operator of multi-family investment properties. 

“Each Yellowstone project is infused with capital to make a meaningful impact on the quality of its residents’ lives. Yellowstone is selective in its acquisitions, choosing assets that have been well-maintained, are favorably located in strong rental markets, are undervalued and are the ‘best in market’ for renters by necessity,” the firm writes on its website.  

The Edge at Greentree includes a mix of one, two and three-bedroom units off Naamans Road. | DBT PHOTO BY MIKE ROCHELEAU

The seller was a joint venture between real estate investment firms Spruce Capital Partners, of New York City, and Post Road Properties of Stamford, Conn., which bought the complex in 2016 for $31 million. It represents a sale-to-sale return on investment of about 66% and a per unit cost of $180,069 amid a real estate market that favors sellers. Rents for Edge at Greentree units run between about $1,000 and $1,800, according to online listings.

Requests for comment on the sale to the buying firm and selling partners were not returned.

The most recent sale represents a continuation of increasingly profitable flips of the complex over the past decade. Pennsylvania-based Galman Group sold the complex to the Spruce Capital-Post Road venture after buying it for $14.8 million in December 2013 – meaning its sale value has appreciated nearly 250% in less than a decade. During its ownership tenure, Galman invested in extensive unit renovations and improved amenities of the complex formerly known as Greentree Village.

The $51.5 million sale ranks among the most expensive deals in recent years, with Incyte paying $50 million for the Friends School Lower Campus in Alapocas in 2019 and a Canadian health care real estate investment firm closing a $67 million deal on three Delaware nursing and rehabilitation centers last year. The most expensive multi-family sale in recent years was the sale of The Garrison in Delaware City last year for $30.6 million.

The Edge at Greentree’s potential value has likely increased due to the massive redevelopment work now ongoing in the Claymont area. The former Evraz Steel Mill is being redeveloped into a massive mixed-use project called First State Crossing. That 425-acre project, led by the St. Louis-based Commercial Development Company, includes light industrial, office, retail, and residential.

Former owner The Galman Group invested in renovations of the Edge at Greentree that remain today. | DBT PHOTO BY MIKE ROCHELEAU

Meanwhile, across the street from the closed steel mill, the beleaguered former Tri-State Mall is also looking at a new lease on life after New York real estate investment firm KPR recently bought the property and plans to raze and redevelop it as well.

The recent sale is seemingly further evidence of the increasing optimism in the Pennsylvania border community that has long pegged its economy to steel mills and oil refineries. Brett Saddler, executive director of the Claymont Renaissance Development Corp., a nonprofit tasked with promoting strategies for the community’s economic development and revitalization, said it “shows how bullish investors are with bringing new residents into a revitalizing Claymont.”

Noting that home values in Darley Green have risen to above $400,000 and rentals in that community often have a waiting list, Saddler said that Claymont has found success in selling its location to young professionals working in Philadelphia. With access to a SEPTA station and a less than 25-mile drive to Center City, the location and favorable tax rates in Delaware have helped that attraction.

That increasing population base and plans to add more than 2,500 more residents at First State Crossing has interest growing from companies and stores looking at the area, Saddler said.

Editor’s note: This story originally misstated the name of the company working on First State Crossing. It’s Commercial Development Company, not Community Development Corp. It also plans closer to 2,500 residential units than 1,000. We regret these errors.

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