Dixon Advisory’s US portfolio up to 101 properties as it moves further into New Jersey suburbs

Dixon Advisory’s US portfolio up to 101 properties as it moves further into New Jersey suburbs
Dixon Advisory’s US portfolio up to 101 properties as it moves further into New Jersey suburbs

The US Masters Residential Property Fund, which invests in residential property in New Jersey across the Hudson River from Manhattan, bought a further eight properties in January, taking its total portfolio to 101 properties worth US$20 million ($18.6 million).

The fund bought six properties in its usual local of Jersey City, but also ventured 10 kilometres south to acquire two properties in Bayonne, a city with a population of 63,000 and large Italian, Irish and Polish communities.

In Bayonne, the fund paid $204,000 for a two-family detached property on 28th Street featuring one four-bedroom apartment and one three-bedroom apartment and $139,000 for a two-family attached property featuring two three-bedroom apartments on 47th Street, both with estimated annual net yields of 8%.

Dixon Advisory managing director and manager of the US fund Alan Dixon tells Property Observer Bayonne is a town the team has really liked from day one.

“Whilst it is still very well connected by mass transit, it is less of a Manhattan commuter town and more of a community of its own.  Most Bayonne residents are very loyal to the town and more likely to have family history there, or have met/married/partnered with someone from Bayonne. Additionally Bayonne has a very strong presence of public servants such as policeman and fireman who reside in the area and make great tenants,” he says.

“The median household income of $53,387 is above the national average of $46,326.  The housing stock in Bayonne is perfect for what we are trying to do.

“In addition to apartment blocks, there is a significant amount of two-family and three-family homes that have fallen that have fallen substantially in price since the peak in 2006, but have remained very popular with renters who want the feel of living in a home rather than a large apartment block,” he says.

Dixon says the housing stock in Bayonne looks very similar to the properties in Jersey City, but Bayonne has a more open feel and is perhaps a little less hectic than Jersey City.

“There are more parks and open spaces and the industrial feel of the city is continuing to transform over time,” he says.

In addition to the two properties the fund has closed in Bayonne and announced to the market, there are another 11 properties under contract that it will be closing during coming months.

“We have commenced a process to increase the areas we are actively reviewing properties within Hudson County.  In particular, we are seeing promising signs in North Bergen, Union City, West New York and Weehawken.  At this stage, however, the large bulk of successful purchases have been in Jersey City and now in Bayonne,” he says.

The remaining six properties purchased in Jersey City in January ranged in price from $143,000 to $243,000 with yields from 8.4% to 10.1%.

The fund also received conditional acceptances on a further eight properties over January.

In January 33 investors took part in the third and final stage of Dixon Advisory’s second capital raising offer to buy shares in the fund. In total $1.27 million was invested in the third stage taking the total equity raised to $31.14 million from 929 investors.

In its first capital raising round ahead of its float on the small cap NSX, the fund raised just under $70 million from 1,500 investors.

The fund’s share is currently trading at $1.55 having listed at $1.70.

It has a market capitalisation of $96 million.

 

 

 

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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