WATERTOWN — Jacob “Jake” Johnson learned a lot from his mentor and how he built up his portfolio of real estate properties in and around the city.
Now, Mr. Johnson and his mentor, Brian H. Murray, have teamed up with each other to acquire Kelsey Creek Apartments on the city’s north side.
They recently bought the 100-unit apartment complex for $5.9 million. It’s the first joint venture for the two biggest players in the city’s real estate market.
The deal was finalized on Dec. 21. Cousins Benjamin and Matthew Waldroff, who Mr. Johnson has worked on real estate deals in the past, are also part of the partnership, doing business as Kelsey Creek LLC.
“The high quality” of the apartment complex drew he and his partners’ interest into the property, Mr. Johnson said. They plan to make general improvements to the units as tenants move out, he said.
“We were really excited about us acquiring the asset,” he said.
They purchased the property from North Country Watertown Development. Previously, Mr. Murray had acquired other properties from the company.
“Brian already had a rapport with the seller and had an interest if the gentleman ever wanted to sell,” Mr. Johnson said.
Mr. Murray secured a $4.3 million mortgage from AmeriCU Credit Union to help finance purchasing the apartments, according to records with the Jefferson County Clerk’s office.
Built in 1990, Kelsey Creek Apartments sits on nearly seven acres on Superior Street. As of Friday, all the rent-subsidized apartments in the complex became market rate apartments, Mr. Johnson said.
The partners liked the location of the property, and its proximity to outer Bradley Street, Interstate 81, retail businesses and restaurants. The apartment complex currently has a 99 percent occupancy, Mr. Johnson said.
While it’s the first time that they’ve acquired a property together, Mr. Johnson has purchased some of Mr. Murray’s properties in recent years, including the Commerce Building on the south side of Public Square, the Rouse complex at 513 Washington St. and Riverview Apartments, 497 Newell St.
“He’s been a mentor and a great business role model, so I’m very appreciative he’s giving us the opportunity to be a partner in this property,” Mr. Johnson said.
Lance Evans, executive officer for the Jefferson-Lewis and St. Lawrence Board of Realtors, heard that the group led by Mr. Murray and Mr. Johnson purchased Kelsey Creek Apartments.
With both of them involved, the deal brings less of a risk if only one of the real estate developers were purchasing it, Mr. Evans said. The two businessmen also have been successful in the north country real estate market, with commercial and residential properties, he said.
“They both have their expertise,” he said.
He thinks that they will continue to keep Kelsey Creek a well maintained property as was the case under the previous owner.
Mr. Murray, owner of Washington Street Properties, is a partner in redeveloping the historic Lincoln Building on Public Square and owns a number of other apartment complexes in the city. In the past couple of years, Mr. Murray has divested about 20 percent of his Watertown assets and has invested in mobile home parks outside of the north country.
Last April, Mr. Johnson sold Jake’s Lawn Care & Landscaping and got out of the business so he could devote all of his energies to his growing real estate development company.
When Mr. Johnson recently received a $2.25 million loan from the Watertown Local Development Corp. for Riverview Apartments, Watertown Trust CEO Donald W. Rutherford expressed his confidence in Mr. Johnson and the way he’s been handling his properties.
“Brian wants to divest some of his properties, and Jake wants to be the next Brian,” Mr. Rutherford said in December.
Mr. Johnson has now accumulated 40-plus properties in and around the city. He plans to redevelop the former Club Rio on Franklin Street.
He and another set of partners also purchased the former Great American grocery store on State Street and he and businessman Bobby Ferris purchased a small plaza on outer Washington Street.
Mr. Johnson also owns a former warehouse at 454 State St. that he’s converted into a year-round indoor market that houses furniture, clothing and food vendors.