For the first time since 2009, the U.S. multifamily real estate sector’s annual sales volume is flirting with falling below the preceding year’s total. Through the first three quarters of 2017, U.S. multifamily investment sales totaled a little over $104 billion, according to Real Capital Analytics (RCA), which tracks sales of multifamily properties and portfolios that are $2.5 million and greater. Experts don’t anticipate sales activity in the last quarter of the year to be enough to surpass last year’s grand total of $160.6 billion in trade volume. As a follow up to the cover article “Coming Back Down to Earth” from the September issue of Southeast Real Estate Business, we caught up with Darron Kattan, managing director of Franklin Street’s Tampa office, to get his take on the U.S. multifamily market. The following is an edited interview: Southeast Real Estate Business: Thus far in 2017, multifamily investment sales are on track to be below 2016 totals. In your opinion, what is causing the decreasing volume? Kattan: A few factors are contributing to this trend. First, the slight increase in the interest rates have given the market pause. Many sellers that have owned for a long time are sitting squarely …
Always on the lookout for new yield-producing products, commercial property investors have turned affordable housing into the latest hot alternative real estate asset. Backed by government subsidies and incentives, affordable housing investments provide the relative safety and income of a high-yield Treasury bond or net-lease investment, which is hard to pass up in the crowded field that has driven up conventional property prices. “A lot of cash buyers and funds have come into the affordable housing market. They see it as a stable asset class,” says Heidi Burkhart, founder and president of New York-based Dane Real Estate, an affordable housing brokerage that has closed some $1.5 billion in transactions since 2008. “It’s a cool time to be in affordable housing; it’s a hot topic.” It’s going to get hotter. Economic and cultural trends portend a shortage of the product for years to come as college debt, unpredictable job creation, high home prices, rising rents and other variables are blocking home ownership and weighing down renters, according to observers and Affordable Housing: Emerging Asset Class, Global Investment Possibilities, a report issued by CBRE in July. In New York City, some 54 percent of renters in 2015 were “cost-burdened,” paying more than …
LUDLOW, MASS. — WinnCompanies has completed the $19.3 million adaptive reuse project that transformed a 110-year-old mill building into Residences at Mill 10, an age-restricted seniors housing property located in Ludlow. The four-story, 108,163-square-foot building features 63 one-bedroom and 12 two-bedroom apartments for residents age 55 and older. On-site amenities include community spaces and common areas on each floor, a fitness center, laundry facilities, a resident lounge and parking. WinnResidential is managing the property, which is fully leased. Dellbrook Construction served as general contractor and The Architectural Team provided architectural services for the project.
SHIPPENSBURG, PA. — Berkadia has arranged $32.5 million in financing for Deerfield Commons, a multifamily property located at 100 Deerfield Commons in Shippensburg. Deerfield Commons LP is the borrower. Brian Campbell, Jeremy Lynch and Jake Adoni of Berkadia secured the permanent refinancing loan through the firm’s Fannie Mae program for the borrower. The 10-year fixed-rate, non-recourse loan represented a 75 percent loan-to-value ratio and included two years of interest-only payments followed by a 30-year amortization schedule. The property, which was 95 percent leased at the time of financing, features one-, two- and three-bedroom floor plans. On-site amenities include a fitness center, swimming pool, business center, ponds and wildlife areas.
WORCESTER, MASS. — Northeast Private Client Group has negotiated the sale of Longfellow Manor Apartments, located at 1002-1008 Main St. in Worcester. Emerald Empire Inc. acquired the building from a Framingham, Mass.-based trust for $2.3 million, or $49,000 per unit. The value-add property features 39 one-bedroom units and eight two-bedroom units. Taylor Perun and Timothy McGeary of Northeast Private Client Group represented the seller and procured the buyer in the deal.
DALLAS — Dougherty Mortgage LLC has arranged a $5.3 million loan for the acquisition of Woodside Lane Apartments, a 107-unit multifamily community located at 9302 Forest Lane in Dallas. The 12-year Fannie Mae loan features a 30-year amortization schedule and was arranged through a partnership with Old Capital Lending on behalf of the borrower, TFG Woodside LLC.
COLUMBIA, S.C. — Hunt Mortgage Group has provided $22.3 million in financing for the acquisition of a three-property multifamily portfolio in Columbia. Aline Capital LLC arranged the financing utilizing the Fannie Mae Green Rewards Program. In addition to purchasing the portfolio, the undisclosed borrower will use the funds to invest in energy efficient renovations and improve the apartment unit interiors. The portfolio totals 625 units and includes Park Place Apartments, Copperfield Apartments and Hunter’s Ridge Apartments.
SCOTTSDALE, ARIZ. — Bascom Arizona Ventures, a subsidiary of Irvine, Calif.-based private equity firm The Bascom Group, has acquired a two-property multifamily portfolio totaling 724 units in Scottsdale. The sales price was $148 million, or $204,420 per unit. The seller was a fund managed by London-based TH Real Estate. Legend at Kierland and Tradition at Kierland are both Class A properties situated within the Kierland master-planned community in North Scottsdale. Both are located within walking distance of Scottsdale Quarter and Kierland Commons, two shopping and entertainment developments. Both properties were constructed in the late 1990s by luxury apartment builder Mark Taylor. Each property offers a resort-style pool and spa, volleyball and tennis courts, a 24-hour fitness center and attached garages. The purchase follows Bascom’s recent acquisition of an 812-unit portfolio of three multifamily properties located in Tucson and Sierra Vista. The sales price of that transaction was approximately $70.2 million. The new ownership plans to invest in capital improvements to both properties, including upgrades to the leasing offices, pool and other common areas and unit interiors. “The Kierland portfolio provides us with an exceptional opportunity to acquire two Class A properties in an absolutely perfect location,” says Mark Brotherton, portfolio …
DENVER — ColRich Multifamily has acquired The Park at Canyon Ridge, a 272-unit apartment community in Denver, for $44.9 million. The community is located at 9757 E. Colorado Ave. The Park at Canyon Ridge is situated near light rail service, schools and major employment drivers, including the Fitzsimons Medical Campus, the Southeast Business Corridor and Buckley Air Force Base. The 13-acre community features units averaging 785 square feet with washers and dryers, fireplaces and private balconies. Amenities include a large swimming pool, fitness center and dog park. The Park at Canyon Ridge is 94 percent leased. HFF’s Jordan Robbins, Jeff Haag and Anna Stevens executed the transaction.
OXNARD, CALIF. — iBorrow, a private commercial real estate lender, has provided a $12.5 million loan for an assisted living community currently undergoing major renovations in the Los Angeles suburb of Oxnard. Originally built in 1960, the 59,650-square-foot property sits on 2.4 acres. Following completion of the renovations in 2018, the property will feature 102 units. The borrower, Global Premier Development, has already invested $10 million into the property and plans to invest further. Meridian Senior Living will operate the community following the redevelopment project. Although the name of the community was not disclosed, Meridian lists Regency Palms Oxnard as its only community in Oxnard. The company’s website states that the community will open in March 2018.