Dranoff Exits Philadelphia Rentals With Sale To Aimco

by Steve Lubetkin, Globest.com

Dranoff Properties is exiting its Philadelphia multifamily rental properties, selling them to Denver-based Apartment and Investment Management Company for $445 million in cash and equity. According to local news site Philly.com, the equity will make Dranoff Properties founder and CEO Carl Dranoff the largest non-institutional shareholder in Aimco.

The portfolio includes six properties, totaling 1,006 existing apartment homes, 110 apartment homes under construction, and 185,000 square feet of office and retail space.

The Dranoff portfolio includes Locust on the Park in the Fitler Square neighborhood, 777 South Broad and Southstar Lofts on the Avenue of the Arts, The Left Bank in University City, The Victor in Camden, NJ, and One Ardmore Place in Lower Merion Township.

“Over the past twenty years, we’ve developed and assembled a portfolio of rental properties that has redefined luxury living in the Philadelphia region,” says Carl Dranoff, founder and CEO of Dranoff Properties. “With a pipeline of new and exciting projects on the horizon, the timing is right to sell six of our premier properties to Aimco and become a major investor in the company. Aimco’s expansion and commitment to Philadelphia make them ideal stewards of these trophy assets that we carefully built, owned and managed. I am incredibly enthusiastic about the future of Dranoff Properties as we begin our third decade. Propelled by a strong capital base, powerful brand and deep talent pool, we look forward to delivering a fresh new generation of transformative projects in the Philadelphia region and beyond.”

“We are thrilled to acquire these well-located communities in Philadelphia, a market we know and like,” says Aimco chairman/CEO Terry Considine. “I appreciate the significant investment in Aimco made by highly regarded local developer Carl Dranoff and the faith he has in our ability to manage these assets, guarding their quality and providing excellent service to their residents. Carl and his talented team have transformed residential living in Philadelphia. I wish them continued success.”

The acquisitions from Dranoff Properties are expected to close in the second quarter, except for the purchase of One Ardmore Place, which is expected to close in first quarter 2019, after completion of construction.

“We continue to be bullish on Philadelphia whose stable and diversified economy is enjoying a growth spurt,” says Aimco executive vice president Wes Powell, who led the Aimco acquisition team. “Center City and University City’s ‘eds and meds’ rival Cambridge and Palo Alto with their highly educated workforces and the city provides a cost-effective alternative to the other Northeastern hubs of Washington D.C., New York, and Boston.”

Earlier this year, in an exclusive interview with GlobeSt.com, Dranoff also expressed optimism about Philadelphia’s prospects.

“Things are booming in Philadelphia,” Dranoff told GlobeSt.com at the time. “The rental market is good, there are new skyscrapers, millennials are graduating from our universities and staying, Comcast is adding thousands of jobs, office users are coming into Center City because it’s where the workers are, and we have baby boomers too, that are moving back to the city.”

Dranoff is turning his focus to his luxury apartment and condo developments, including the nearly completed One Theater Square apartments adjacent to the New Jersey Performing Arts Center in Newark, NJ.

Correction, 4/17/2018, 4:37 p.m.: Because of editing errors, a headline on an earlier version of this article suggested that Dranoff Properties was exiting completely from Philadelphia. The portfolio sale only includes multifamily rental properties in the market. Also, an earlier version of the article incorrectly described the project in Newark, NJ as the “Theater Lofts.” The property is actually called One Theater Square, and is a rental property, not condominiums.
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