MURRAY HILL — A Colorado-based real estate company is on track to shell out nearly $600 million to buy two Manhattan apartment buildings, adding luxury amenities in a move that could see rents rise as much as 35 percent, according to the company.
UDR, which owns and operates rental properties across the country, has agreed to pay $443 million for Rivergate, a 706-unit apartment building at 34th Street along the East River.
The company also bought 21 Chelsea, a 210-unit apartment building on 21st Street between Sixth and Seventh avenues, for $138 million. UDR expects both purchases, for a total of $581 million, to be finalized later this year.
At Rivergate, built in 1985, UDR is planning to spend between $40 and $60 million in renovations over the next three years. The company expects to put that money toward high-end kitchens and bathrooms and amenities such as a glass-enclosed, 6,000-square-foot rooftop fitness center, a business center and a resident lounge.
Once the renovations are complete, the company plans to increase rents by about 35 percent. Rents in the building range from $2,500 for a one-bedroom apartment to $4,300 for a convertible three bedroom/two-bath unit, according to the Rivergate website. The proposed increase would raise those rents to $3,375 and $5,805, respectively.
At 21 Chelsea, UDR has somewhat more subdued construction plans. There, the company plans to spend up to $8 million over the next two years to upgrade kitchens and bathrooms and to renovate the building’s lobby and rooftop.
After the upgrades are complete, UDR expects to raise rents by about 20 percent. The building’s current management company lists a one-bedroom apartment on the fifth floor of 21 Chelsea for $3,350. If the proposed rental increase takes effect, the same unit would go for roughly $4,000.
“Pending completion, the off-market acquisitions of Rivergate and 21 Chelsea are an opportunity to substantially increase rents,” UDR President and CEO Tom Toomey said in a statement.
