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Source: Pennrose Sold Its Two Hub City Highrises For $35.5 Million

Skyline Tower and The George Sold to Highland Park's Oxford Realty Group
Skyline Tower
Skyline Tower was once New Brunswick's tallest building. Charlie Kratovil

NEW BRUNSWICK, NJ—Two highrise apartment buildings in downtown New Brunswick, including the county government's former headquarters, were quietly sold last year, but it's proven to be a challenge to find out the sale price.

Both the buyer, Oxford Realty Group, and the seller, Pennrose Properties, have not responded to inquiries about the multi-million dollar deal.  Records available at the County Clerk's Office also did not provide basic information about the sale.

But, according to an inside source, the Skyline Tower Apartments, located at 60 Paterson Street, and "The George," located at 285 George Street, were sold for a combined $35.5 million last summer.

Both buildings represented collaborations between Pennrose, a for-profit, Philadelphia-based company, and the New Brunswick Development Corporation (DEVCO), a non-profit developer that often gets favorable treatment from the city it calls home.

Oxford has managed a slew of garden apartments on Cedar Lane in Highland Park, as well as New Brunswick's Tov Manor apartments. Their website says the company has been around since 1957 and lists rental properties in three states: New Jersey, New York, and Pennsylvania.

Among the New Jersey rental complexes are four in Somerset, five in Highland Park, and one each in Edison, Somerville, Springfield, and Morristown.

Oxford's New Brunswick highrise purchases come on the heels of two other big real estate investments made in partnership with The KRE Group, short for Kushner Real Estate Group, a company owned in part by Murray Kushner.

Kushner is the uncle of Jared Kushner, the senior adviser to President Donald Trump, another real estate developer who once ran in the same circles.

In late 2015, Oxford and KRE teamed up to purchase the 550-unit Royal Gardens Apartments in Piscataway for $107 million.

The two companies followed up that deal with another big purchase four months later, buying the 288-unit Deer Creek Apartments in Plainsboro for $45 million.

The George opened in 2013 and includes 104 rental units in a 14-story building, along with three storefronts at the ground level.  DEVCO secured the approvals to build it, and managed the construction, then brought in Pennrose in to rent the apartments and manage the building.

Pennrose has been around since 1971, and bought their first property in New Jersey twenty years later: Providence Square, an abandoned cigar factory in New Brunswick that was transformed into housing for seniors.

Since then, the company opened two additional senior buildings in New Brunswick: Livingston Manor and Providence Square II.  According to their website, they have developed more than 220 properties in 14 states, as well as Washington, DC.

The company is also preparing to build a seven-story building for residents over the age of 55 on Neilson Street, recently securing the unanimous approval of the city's Zoning Board of Adjustment.  The City Council is preparing to vote on a 30-year tax exemption for the property at their April 5 meeting.

Skyline Tower was built in the 1960’s for the Middlesex County government, four decades before it was renovated and re-opened as luxury apartments back in 2003. Three floors remain used by the Middlesex County Court, while the rest has been transformed into 70 housing rental units managed by Pennrose.

As we reported, the Middlesex County government and the New Brunswick Housing Authority approved changes to the agreement with Pennrose to help clear the way for the pending sale.

The iconic 12-story building was also the scene of terrible crime in 2015, when a 23-year-old Rutgers graduate named Christine Huh was murdered in a ninth-floor apartment.  

Jason Molina, just 16 years old at the time, was arrested and charged with this murder as an adult.  Molina, who hails from Bridgewater, is the son of the building’s former superintendent, and the murder allegedly took place in the apartment registered to the father.

It's not clear whether the murder had anything to do with the building's sale just one year later.  But one well-placed source told NBToday that Pennrose has little experience with managing "luxury" buildings, a factor that may have contributed to the quick sale.

The next court date in the State's case against Molina is scheduled for April 5 at 10 AM in room 408 at the Middlesex County Courthouse, just a few hundred feet from the scene of the crime.

New Brunswick Today reached out to Oxford Realty many times to find out why they purchased the properties, but they did not respond.  Residents say that the new owners have been making improvements to the building.

According to documents available at the County Clerk's Office, a company called Rieder Holdings took out a mortgage worth $18,128,000 on The George from the corporate investment management company Jones Lange Lasalle Multifamily, LLC.

Jones Lange Lasalle has also partnered with DEVCO to market a potential redevelopment venture across from the New Brunswick train station at the former site of the Ferren Mall and parking garage

It's not clear what the relationship is between Rieder Holdings and Oxford Realty, which are both based in Highland Park.  The Oxford Realty Group website says it is a "family-owned" company but does not mention the name of the family.

However, according to a negative online review that called the operators of one of their complexes "quintessential slumlords" lists a few of the key players in the organization.

"This shady organization is run by the Lafonge Associates: George Karasick, Susan Lee and Harry Rieder," reads the comment.  "They employ 2 property managers and office staff to run a clutch of the filthiest, dirtiest residential hovels ever seen in industrialized countries."

The Reider family is no stranger to New Brunswick real estate, and has became a staple in the Central Jersey development and construction businesses.

Back in 1989, Ralph Rieder Companies of Highland Park was involved in the construction of subsidized housing for low-income earners. But their highly-anticipated building was never completed.

This was to be financed by the state's subsidy program, which would allow for 27 apartments to be rented to people whose family income was below 50% of the median family income of Middlesex County.

The financing of this building was outlined in a past Star-Ledger article:

One is a $648,000 payment from Raritan Township under the terms of a regional contribution agreement with New Brunswick. Such agreements allow a suburban or rural municipality to satisfy up to half its legal obligation to provide low- and moderate-income housing by paying for it to be built in a city.

The other is a $750,000 federal Urban Development Action Grant. Under the terms of that program, a developer may obtain the loan of federal money at reduced interest to help finance a redevelopment project, then repay the loan to the city, which may then use the money for another redevelopment project.

In addition, Lerman said, the Ralph Reider Companies obtained a $4.4 million private mortgage and invested $500,000 of their own. 

The Hampton Arms project failed after missing construction deadlines, and New Brunswick re-aquired the area through a tax-foreclosure.  Shortly after this, Ralph Reider filed for bankruptcy.