Jones Street Investment Partnersa Boston-based private equity real estate investment firm, has secured $179 million in construction financing to develop three luxury multifamily communities in Maine and New Hampshire.
The loans for properties in Kittery and Brunswick, Maine, as well as Manchester, NH, also enable Jones Street to expand its portfolio in key secondary markets across the Northeast that are severely supply constrained and have strong rental growth.
Formed in 2014, the firm focuses on multifamily investments in the Northeast and Mid-Atlantic regions of the United States. The portfolio currently has 4,389 apartment units with approximately $1.3 billion of assets under management and $360 million of equity invested. Properties include Town Walk at Hamden Hills, a 764-unit community in Hamden, Conn., a New Haven, Conn., suburb, acquired for $136.5 million in August 2018 from an affiliate of Baker Properties in an off-market transaction. Last year, Jones Street completed more than $850 million in transactions including four acquisitions in Connecticut and Massachusetts valued at $310 million. There were also three dispositions in Maine and Massachusetts, which sold for more than $294 million.
Matt Frazier, founder & CEO of Jones Street Investment Partners, said in a prepared statement each of the three new properties being developed aligns with the firm’s emphasis on long-term, cash flowing investment strategies that have the potential to deliver attractive risk-adjusted returns . He added the ability to secure the loans at attractive terms is a testament to the relationships between Jones Street and the banks as well as the quality of the business plans and the firm’s track record.
Loan, property details
The largest financing package is for the development of Seacoast Residences, a 282-unit multifamily property at 76 Dennett Road in Kittery. Jones Street received a $70 million floating-rate loan from Key Bank and $7.9 million in a preferred equity investment from a major investment manager for the project. Commercial Observer reported the loan term is 36 months with two 12-month extension options.
The five-building property is situated along I-95 and is immediately across the border from Portsmouth, NH Slated for delivery by early 2024, Seacoast Residences will feature luxury unit finishes, a resort-style swimming pool, sun deck, fitness center, on -site nature trails and dog park. It is located in an area with limited rental product and is near major employment centers. Numerous national and regional businesses operate in the New Hampshire and Southeast Maine seacoast regions, including Andover Healthcare, Portsmouth Naval Shipyard, CSI Engineering, Northwestern Mutual and Sun Life Financial.
The other two developments are located in Qualified Opportunity Zones. The larger of the two financing deals is a $65.1 million loan from Berkshire Bank for Jones Street to develop a 250-unit multifamily property at 75 Canal St. in downtown Manchester. Construction is expected to be completed by summer 2024. The property will have studio, one-, two- and three-bedroom apartments and about 2,000 square feet of ground-floor retail space. Community amenities will feature a clubhouse with full-service kitchen and game room, fitness center, business center and two outdoor courtyards. Manchester has low unemployment rates, high affordability and strong economic growth which had led to high occupancy and strong rental growth for multifamily properties in the region. Major employers include Oracle, TD Bank, New York Life and Southern New Hampshire University.
Bangor Savings Bank provided Jones Street with a $36 million loan to develop a 181-unit community on Admiral Fitch Avenue in Brunswick. Slated for delivery in late 2024, the property is located in the Brunswick Landing development, a former naval base that is being revitalized and includes nearly 2 million square feet of commercial and industrial space. Situated about 3 miles from downtown Brunswick and about 30 minutes from downtown Portland, Maine, the property is expected to benefit from a strong employment market. Regional and national employers in the region include LL Bean, VividCloud and General Dynamics Bath Iron Works as well as Bowdoin College.
Colliers arranged the construction loans on Jones Street’s Brunswick and Manchester projects and the preferred equity investment in the Kittery project. The Colliers Debt & Equity team was led by Jeff Black, John Broderick, Sean Burke and Bryan Koop.