Credit: Courtesy The Koman Group
CLAYTON ON THE PARK
LOCATION: Clayton, Mo.
BUYER: The Koman Group,
Creve Coeur, Mo.
SELLER: Sovereign Bank, Boston
THE DEAL: Local commercial-property player acquires former seniors housing tower from its former lender for an undisclosed price with plans to reposition the long-vacant property as luxury rentals.
The makeover of a long-empty (and lender-owned) seniors housing
high-rise into high-end rental apartments is fraught with
challenges. Fortunately for The Koman Group and its operating
partners, the conversion of Clayton On The Park, which developer
Koman recently acquired from former mortgage holder Sovereign Bank,
might more appropriately be characterized as a
“reversion.” The strategically
located, 24-story tower in downtown Clayton, Mo., a suburb of St.
Louis, actually began life as a luxury rental a dozen-some years
The well-appointed tower has been vacant for nearly two years,
in the wake of an ill-timed conversion to seniors housing by
locally based Conrad Properties and retirement-home giant Sunrise
Terms of the deal between Koman and Sovereign
weren't disclosed, but media reports had the
tower trading at $34.3 million, which translates to just under
$165,000 for each of the 208 apartments the new team will lease up
and operate after completing modest improvements.
One key to leasing the units will be the strong team Koman has
assembled to help manage the transition and operate the
historically commercial-leaning firm's inaugural
high-rise multifamily rental property. San
Diego–based Wermers Cos. is acting as
co-developer, while Dallas-based Riverstone Residential Group will
be the property manager.
It also helps that demand for rentals is quite robust in the St.
Louis vicinity and that the supply of newer high-rise rentals in
the dynamic Clayton submarket is limited.
“There's not much available in
high-end rentals [here], generally, and
nothing's coming out of the ground in the near
term,” says Jason Braidwood, the Koman managing
director overseeing the investment.
While it would presumably take a couple to three years for
developers to deliver any competing product, Clayton On The Park
will be ready for new residents after just a few
“finishing touches,” as Braidwood
puts it, including new flooring, counters, fixtures, and
appliances. The team anticipates healthy interest from young
professionals and empty-nesters for the tower's
mostly one- and two-bedroom units, with downtown Clayton having
become quite an entertainment hub for the St. Louis metro area. And
there's nothing else quite like the property
anywhere nearby, as Braidwood is quick to point out. He should
know: Koman also developed the only new Class A office high-rise
downtown Clayton has seen in the past decade.
Wells Fargo offered an appealing senior loan structure to take
down, remodel, and stabilize the asset, Braidwood notes while
declining to disclose further details, including asking rental
rates, which hadn't been set as of press time.
The deal is sitting well with the Koman team, which is already
looking forward to getting its feet wet in anticipation of
additional residential rental investments.
Brad Berton is a freelance writer based in Portland,