500 rt 17 south, suite 303
hasbrouck heights, nj 07604

t. 201.383.4044 | f. 201.383.4088
44 Executive Boulevard, Suite 206
Elmsford, NY 10523

t. 914.208.2200 | f. 914.208.2201
case studies
the Property
Location: Chatham, NJ
Size: 31-unit walk-up
Sale price: $7.2 million
Date closed: 2016
the Challenge
The capitalization rate on this property was extremely low for an incoming buyer. Yet the majority of units were not updated and were in need of significant upgrades. The kitchens were mostly outdated and the building had very little curb appeal. Many of the potential buyers would not look at the deal based on cap rate. The building was also short on off-street parking, which is in high-demand for this area.
the Solution
The Redwood Realty team created a 10-year discounted cash flow analysis showing the incredible untapped potential in the project. The building is located in one of the most desirable towns in New Jersey with a one-minute walk to a train station and the CBD. The rents were substantially lower than the local competition. The project needed to be presented illustrating the upside potential through a rehabilitation program and rent increase to market. We also worked with the seller to design a plan to present to the city that would create additional parking on a lot that was not being utilized.
the Result
Our team brought the property to market with plenty of data to support the upside potential for this asset. We accepted well over a dozen offers and the property traded at a 4.8% cap rate. The winning bid was a sophisticated organization who agreed with our detailed financial analysis and is planning to invest in renovations to reposition this asset.

Hackensack

Chatham

Hasbrouck

500 route 17 south, suite 303
hasbrouck heights, nj 07604
t. 201.383.4044 | f. 201.383.4088
44 Executive Boulevard, Suite 206
Elmsford, NY 10523
t. 914.208.2200 | f. 914.208.2201