Welcome to Merion Realty Partners

Merion Milford

Merion acquired the 246-unit apartment community in February 2023. The community is situated on 22 acres and consists of seven traditional garden style three-story buildings, a clubhouse-leasing center, two detached garage buildings and four detached carports. The property has immediate direct access to I-95 and is located near other major highways such as the Merritt Parkway, the Milford Parkway, Route 1 and is a 20 minute drive to the center of downtown New Haven (north) or Bridgeport (south).

Merion Milford was constructed in 2004 and although the property was professionally managed and maintained over the years, none of the 246 units have been upgraded. It is rare to find a nearly 20 year old asset that is well maintained, yet has not undergone any level of coordinated interior upgrade program. The units themselves show well and are not dated in floorplan and amenities, however, the units have white cabinets with white painted surfaces on the walls, ceilings, trim and dated one inch white window blinds. The appliance package is white as well with fluorescent ceiling fixtures and tan carpeting throughout the living area and plain sheet vinyl kitchen and bathroom flooring. Merion Milford was underwritten to upgrade all of the market-rate units over the hold period.

Although the property was offered free and clear of debt, Merion underwrote the asset with the assumption of seller’s existing 4.05% fixed rate, interest only, Freddie Mac mortgage loan that will mature in January 2025. The assumption will act as a short term bridge loan and will allow Merion’s property management team to execute the Merion “Simply Modern” value-add interior unit upgrade. Upon maturity of the loan, Merion has underwritten a permanent loan that should provide proceeds sufficient to return a percentage of investors initial equity investment while maintaining a current yield on remaining invested capital.

Merion Multifamily Fund III

Barclay Chase at Marlton | Marlton Gateway | Barclay Glen at Cross Keys | Halstead Place

Merion Realty Partners acquired a four-property apartment portfolio consisting of 640 multifamily apartment units located in three distinct New Jersey sub-markets. The portfolio was acquired from the developer in what was considered an “off-market” transaction in that Merion did not participate in an open market bidding process. Merion invited investors to participate in a fully identified $50 million fund and the transaction closed in April 2021. Since acquisition, Merion has executed their business plan and have generated consistent quarterly returns to investors.

The properties were constructed between 2013 and 2019 and all experienced swift lease-up and maintained high occupancies with very little delinquency through COVID. The assets are well constructed with thoughtful building design and each have a distinct advantage in superior finishes and amenity packages within their respective submarkets. Merion premised their investment strategy on the knowledge that prior ownership had not capitalized on the assets’ superiority to other recently constructed competitors that may have lower quality, or “builder grade” finishes.

Upon acquisition, Merion Residential put forth a new marketing strategy and trained existing and new employees. An exterior capital improvement plan was immediately executed that included new signage, landscaping improvements, and general refresh. These improvements along with resident outreach were very well received by existing and new residents. Merion also implemented the use of revenue optimization software that helped establish rental rates for specific unit types which quickly proved Merion’s understanding that the properties trailed their competitors when they should be market leaders. While most of the properties in the portfolio had very nice interior finishes, there was an opportunity to upgrade select units to test market demand for a higher quality level of finish, for a premium. Merion’s “Simply Modern” upgraded units have outpaced our initial underwriting in terms of demand for those units and the rent premiums received.

Merion does not take on undue risk with floating rate debt and placed Freddie Mac seven-year fixed rate debt on Barclay Glen and Fannie Mae ten-year fixed rate debt on Barclay Chase and Marlton Gateway. The 35 unit Halstead property was underwritten to a two to three year hold and was financed with floating rate debt in order to allow for flexibility of prepayment. It is expected that this property will be sold in 2024. Further hedging future exposure to increased expenses, Barclay Chase was acquired with the balance of a Payment in Lieu of Taxes (“PILOT”) agreement that expires in 2038. The PILOT agreement helps mitigate against any real estate tax reassessment risk for the duration of the PILOT term and is assumable by future purchasers of the property.

The properties held within the portfolio enjoy strong occupancy and demand within their respective markets. The Merion Multifamily Fund III continues to generate consistent quarterly returns to investors with appreciation of equity value since acquisition.