Carmel Partners sells Norwalk apartment complex valued at $157M

Developer Carmel Partners, which has been in hot water over its potential involvement in the corruption case of Los Angeles City Council member Jose Huizar, has sold its majority stake in a 464-unit rental complex in Norwalk, Connecticut.

Invictus Real Estate Partners, which owned 10 percent of The Waypointe at 515 West Avenue, bought Carmel’s 90 percent stake. The property is valued at $157 million.

“We believe in Norwalk,” said Eric Scheffler, the managing partner of Invictus. “I think it’s strengthened by the exodus of people leaving New York City. And it’s a great value proposition to rent closer to New York City.”

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The two-building complex, which includes 56,000 square feet of ground floor retail and restaurant space, opened in 2015. Its apartments are currently 93 percent occupied, while the retail space is 74 percent leased, Scheffler said.

Luxury rental apartment buildings have been sprouting up in New York City suburbs in recent years, luring millennials and empty-nesters in with the promise of more space for less money than New York City.

A two-bedroom, 1,200-square-foot apartment at The Waypointe rents for about $2,600, Scheffler said. The median rent in New York City for Aug. 2020 was nearly $3,200/month, according to Douglas Elliman’s latest market report, and market-rate rentals in the city typically rent for substantially more.

The pandemic has broadened the Manhattan diaspora as people look for more room to work from home, said Scott Aiese of JLL, whose capital markets team, including Peter Rotchford, Alex Staikos and Brendan Collins, helped secure a $107.25 million acquisition financing for Invictus.

“It’s a pretty nice asset to live in, and you get your home offices,” he said of the complex, adding that some millennials see renting in the suburbs as a stepping stone to eventually buying a home in the area.

“It’s a nice, vibrant, young community,” Scheffler said. “Since people don’t have to be in the office every day right now … they can enjoy having a much larger and nicer apartment for much less money.”