Bank sales: Iron Stone buys 800 Philly apts for $25M

Iron Stone Strategic Capital Partners, Philadelphia, has bought 787 apartments in 12 buildings in working-class city neighborhoods, for $25 million, from Citibank and Intervest Bank, New York, which had seized them from the former American Gardens Apartments when the New York-based landlord fell behind on loan payments.

The buildings are around 40% vacant, Iron Stone's Jason Friedland told me. One building, 216 S. 48th St., is adjacent to the Windemere Court Apartments, which burned Jan. 11 in a spectacular fire. Friedlander said several Windemere tenants are being housed in his newly-acquired building, and some have applied for leases. "They were fighting the firat from our roof," he told me.

Iron Stone's new buildings include, in West Philadelphia, the 48th St. complex, plus 4931 Spruce, 5016 Pine, 502 S. 57th, 508 S. 41st, 4207 Chester, and 4927 Whnnefield; also 715 Church St., Germantown; 1418 Conlyn St., W. Oak Lane; 330 West Johnson, W. Mount Airy; 4628 Leiper, Frankford; and 1605 W. Allegheney, in North Philly near Temple's medical school.

The sales double Iron Stone's local apartment portfolio, after previous purchases of the former Ogontz Manor (now the Julian) near LaSalle University, and other city buildings, during the 2008 credit crisis. The new deals closed in late December and early January after more than a year of negotiations. Iron Stone was formed with $50 million in investor committments in 2007.

The former landlord owed Citibank alone $90 million for 2,000 apartments in Philadelphia, Camden, Chester and other cities. Iron Stone bought 511 of those apartments for $16 million, and the other 276 units from Intervest for $9 million, Friedland said.

The deal was financed with help from Intervest and five local banks: Downingtown National Bank, Vist Bank of Wyomising, and East River, Valley Green and First Federal of Bucks County.