Our roots are anchored in residential development, and have spread over the years into all areas of real estate. Today, our capabilities range from the acquisition and ownership of income producing properties to the development of large scale projects. As consistent with our philosophy to take advantage of opportunities across various market conditions, we also have in depth experience in the purchase of distressed assets, including debt.
Some representative transactions are noted below:
The Preserve at Somers is a 300-acre, $110.0 million residential community consisting of 188 single-family homes situated on one-half acre lots. Homes in the development were sold out in approximately three years, with price increases moving average starting prices from $400,000 to almost $900,000.
Wharton Equity Partners was integrally involved in structuring the acquisition and financing of the property; securing all approvals for the site; and overseeing all aspects of construction (homes and infrastructure) and marketing of the project. Large-scale improvements included the off-site installation of three miles of sewer lines to connect to a sewage treatment plant as well as an on-site water system including a large water tower.
In two separate transactions, Wharton Equity Partners, in conjunction with Madison Capital Management, LLC, orchestrated the acquisition of two warehouse properties that primarily cater to the fine art and antiques industries, in addition to providing traditional self storage. Located on East 61st Street and West 55th Street in Manhattan, the properties provide storage and logistical services such as packing, crating and shipping to a variety of clients from museums and galleries to private collectors. A comprehensive renovation program for both properties was undertaken. Debt financing for both acquisitions was provided by Prudential Mortgage Company. Total capitalization of the two transactions exceeded $80.0 million. Wharton Equity Partners has subsequently sold its equity interest in the properties to an affiliate of Madison Capital Management, LLC.
Wharton Equity Partners, in partnership with Madison Capital Management, LLC, engineered the purchase from The Blackstone Group of an approximately 600,000 square foot mixed use project located in Lexington, KY, consisting of a 365 room, full service hotel and 250,000 square foot office building. Wharton and Madison also negotiated the re-flagging of the hotel from a Radisson to a Hilton, and began a $13.0 million "PIP," which includes a complete renovation of the guest rooms, lobby, and other public spaces. Debt financing for the approximately $50.0 million transaction was provided by an affiliate of Legg Mason. Wharton Equity Partners has subsequently sold its equity interest in the properties to an affiliate of Madison Capital Management, LLC.
An affiliate of Wharton Equity Partners, Columbia Storage Management, acquired a portfolio of approximately 6,500 self-storage units (400,000 sq. ft.) from Storage USA (a subsidiary of GE). Located in the New York metropolitan area, the warehouse facilities required extensive renovations and were repositioned as "The Storage Company" with a new logo and brand identity. The transaction was financed with an acquisition loan from UBS Real Estate Investments, Inc. and equity was provided by a major institutional investor.
After successfully repositioning the assets, Wharton Equity Partners sold the portfolio to an affiliate of Northwestern Mutual Life for approximately $56.0 million. The transaction yielded an annual compounded return in excess of 26%. This is the second time in which Wharton Equity Partners acquired a concentration of self storage properties in one market, turned them around and sold the portfolio to an institutional investor. In 2002, the company sold 2,200 self storage unit units in the "Hamptons" market on Long Island, New York to Sovran Self Storage (NYSE:SSS). Wharton had acquired the properties through a series of acquisitions, ultimately controlling 80% of the self storage units in the area.
2.7 million buildable square foot, 304 acre mixed use property located in Myrtle Beach, South Carolina, adjacent to the Myrtle Beach International Airport. The project was approved for approximately 1.2 million square feet of residential development and 1.5 million square feet of commercial development. The property was sold by Wharton Equity for $50.0 million to an affiliate of Fortress Investment Group prior to development.