With predemolition work on Ironton at Wharton starting this week, Diversified Properties LLC is a step closer to delivering 60 new condominiums to Morris County, New Jersey.
Diversified Properties paid $2.25 million for the property in a deal that closed last week. The project cost per unit to develop the property is $325,000, bringing the total cost of the development to $19.5 million.
Diversified Properties plans to use the RealtyMogul real estate investing platform to raise $5.9 million from investors, who will receive equity shares in the offering. The minimum investment in the project is $35,000 with a projected internal rate of return of 20%.
The project includes 54 market-rate units and six affordable housing units that are included in accordance with New Jersey law. Diversified Properties plans to complete construction and stabilize the offering through an aggressive lease-up.
Diversified Properties projects a sale price of $385,000 per unit, which would represent a 5% capitalization rate at the end of the projected 2½-year hold period.
Morris County, one of the state’s most sought-after housing markets, is home to 33 Fortune 500 businesses and other major employers, including AT&T, Pfizer Inc., ExxonMobil, Novartis and St. Clare’s Health System. The submarket has a low vacancy rate of 2.1%, and landlords continue to see strong rent growth.
While Morris County has a high cost of living — the median home price is $515,800 compared to the national average of $291,700 — niche.com still ranks the area No. 2 in terms of best counties to live in New Jersey.
Founded in 2000, New Jersey-based Diversified Properties is a real estate development and management company that focuses on value-add and resale of commercial properties in the northeastern United States. It has experience with multifamily, office, self-storage and retail facilities. The company has developed real estate valued at more than $1.5 billion, and its portfolio has an estimated worth in excess of $500 million.
Photo: Courtesy of RealtyMogul
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