A new real estate and private equity company with a strong emphasis on the multifamily and luxury residential sector has launched in New York. Corigin Holdings is the spin-off of Coalco New York, the U.S. operation of international real estate company Coalco Development, headquartered in Moscow.
Corigin has assumed the assets of affiliated domestic businesses and consolidated other U.S. holdings to create two core divisions: Corigin Real Estate Group and Corigin Private Equity Group. The latter holds interests in companies across the, beverage, transportation, and commercial trade finance industries.
Corigin Real Estate Group pursues value-add acquisition opportunities in commercial and residential construction, income-producing properties and adaptive re-use. For example, Corigin is redeveloping the flagship American Can Co. manufacturing plant in Jersey City, N.J. CANco Lofts and CANco Square will total more than 2 million sq. ft., with 1,600 residential units.
Corigin also is the largest private provider of student housing to New York University, having developed and master leased five properties that currently house more than 2,400 NYU students. NREI recently spoke with Ryan Freedman, chairman and CEO of Corigin, about the spin-off.
NREI: What was the impetus behind the spin-off from Coalco?
Freedman: Coalco is a huge company with its primary operations in Moscow. It has about $15 billion in the real estate development pipeline. On a global scale, [Coalco New York] was the smallest piece of the puzzle. The spin-off created simplicity within our structure and provided more efficiency.
NREI: What is the near-term outlook for the Corigin Real Estate Group?
Freedman: We have a strong asset base in our student housing portfolio that consists of five buildings, just under 1 million sq. ft., that is all leased to New York University. It is the core portfolio that allows us to grow in other areas.
We like the student housing business a lot, but it's not the easiest thing to get thesedone in New York City. There is a zoning code that requires a 10-year commitment from universities in order to get [the permits] to complete a student housing development. It is very difficult to find a university or school willing to make that 10-year commitment off the bat because it is a large financial commitment on their part, and it goes on their balance sheet.
NREI: Beyond student housing, what's your game plan?
Freedman: In an ideal world, we will have one development project going on at a time. We'll also continue to acquire assets that make sense, primarily in the multifamily sector. We may look to buy stabilized multifamily assets that earn a 5% cash-on-cash return. With value-add development projects, we look for the IRR (internal rate of return) to be more in the mid 20s.
NREI: Corigin owns assets in New York, New Jersey and Florida. Why Florida?
Freedman: I began my career in Florida developing art deco, historic buildings on Miami Beach. We had an opportunity with a partner to undertake a large project. That's Villa Magna Residences, our main holding. (The project under way will include two 60-story towers that offer 787 residences located on downtown Miami waterfront property.) It's a market we understand well.