Despite the clichés and naysayers, Boston’s apartment fundamentals continue to trend at the top of U.S. cities’ forecasts. For developers, investors and borrowers, Boston truly is that city on a hill. Clichés heard often in the commercial real estate community: Interest rates have no place to go but up. Who is going to pay $4.50-per-square-foot rents? Wait until the next wave of units is delivered. Valuation and yield don’t make sense. The facts: Economists have been predicting interest rate increases for the past five years. Market vacancy has been sub-5 percent for more than five years. Every major apartment player owns or is currently building in Boston, averaging $1.2 billion in product for past three years. Boston is a premier gateway city and buyers want in. The Investor Outlook Simplified When cap rates for the most desired real estate class — in a gateway city, in the safest country for investment in the world — average 4.25 percent, it’s a great time to invest. The 2006 cap rates were just 100 basis points above the 10-year risk-free rate. Today they are 2.0 to 2.25 percent. Half of the deals are cash transactions. Locals can only shake their heads at the …
PALM HARBOR, FLA. — The RADCO Cos. has purchased Lakes of Palm Harbor, a 292-unit, Class B apartment community in Palm Harbor, for $33.5 million. The Atlanta-based multifamily investment and management firm funded the acquisition using private capital and a Fannie Mae loan. ARA Newmark brokered the sale. RADCO plans to spend an estimated $2.5 million to upgrade the exteriors, amenities, landscaping and interior finishes. Built in 1984, Lakes of Palm Harbor’s residences feature open layouts, floor-to-ceiling windows, washer/dryers and modernized kitchens. Community amenities include a newly renovated clubhouse with café and coffee bar, resort-style pool, covered lounge, fitness center, outdoor grilling and picnic area, kayak storage, lighted tennis courts, a beach volleyball court, putting green, playground and dog park. The property fronts the 60-acre Lake St. George.
CHARLOTTE, N.C. — Bluerock Residential Growth REIT Inc. (BRG) has completed the second phase of its acquisition of Ashton Reserve, a Class A apartment community in Charlotte, for $21.8 million. BRG acquired the first phase in August of this year. With the second phase, BRG added 151 newly completed units. The company funded the acquisition using an equity investment of approximately $7.5 million and proceeds of a $15.3 million, 10-year, floating-rate Fannie Mae loan. Built in two stages in 2013 and 2015, the Ashton Reserve Apartments feature high-end one-, two- and three-bedroom layouts with 9-foot ceilings, stainless steel appliances, granite countertops, under-mount sinks and full size washer/dryers. Community amenities include two clubhouses, fitness facilities, a swimming pool with oversized deck and grilling stations, as well as a business center and a private media center.
NEW YORK CITY — Ariel Property Advisors has arranged the sale of a multifamily property located at 161 E. 96th St. in Manhattan. Encore Manhattan LLC acquired the 9,160-square-foot property from a private investor for $6.5 million. The five-story building features 19 large studio apartments. Additionally, the property offers significant future development potential as R104 zoning providing approximately 25,230 buildable square feet as-of-right, or 16,070 square feet of air rights over the existing structure. Michael Tortorici, Howard Raber, Shimon Shkury, Victor Sozio and Matthew Gillis of Ariel Properties Advisors represented the seller and procured the buyer in the transaction.
MENOMONIE, WIS. — Marcus & Millichap has brokered the $1.6 million sale of a 44-unit portfolio in Menomonie, approximately 25 miles west of Eau Claire. The six-building portfolio consists of five residential buildings that contain 44 total units and one eight-stall garage building. The 44 units are broken down into 36 two-bedroom/one-bathroom units and eight one-bedroom/one-bathroom units. The six buildings were constructed between 1977 and 1987. The apartment assets have undergone upgrades including roof replacement, vinyl siding, and new windows, flooring and appliances. Evan Miller, Mox Gunderson and Dan Linnell of Marcus & Millichap listed the property on behalf of the seller, a private investor. Cole Harstad of Marcus & Millichap procured and represented the buyer, a private investor.
FULLERTON, CALIF. — Evans Senior Investments has arranged the sale of Sunnycrest, a private-pay assisted living community in Fullerton in northern Orange County, for $37 million. The community was recently remodeled and includes 130 units, resulting in a price per unit of $284,615. The buyer and seller were not disclosed. Orange County experienced 45 percent growth in the 85+ age demographic between 2000 and 2010, according to the U.S. census. Evans Senior Investments is an investment-banking firm exclusively serving the seniors housing industry.
TUCSON, ARIZ. — An unnamed buyer has acquired a 320-unit apartment complex in Tucson for $33.6 million. The community was built in 1995. The seller was Independence Realty Trust (IRT). The firm will utilize the net cash proceeds to reduce its outstanding debt and for general corporate purposes. The firm is currently in the process of selling properties that fall outside its geographic focus.
TUSTIN, CALIF. — A 23-unit apartment complex in Tustin has sold to Nisson Rd LLC for $3.5 million. The community is located at 1431 Nisson Road. It was built in 1961. The property is fully occupied. Steve Heri and Steve Gim of NAI Capital represented both the buyer and seller, Cal Receivers, in this transaction.
NEW YORK CITY — Equicap has arranged $5 million in permanent financing for a mixed-use property located in the Chinatown section of New York City. The 20-unit property features four retail units and 16 apartments. The borrower, a large not-for-profit, plans to renovate and re-tenant the retail portion of the property. Daniel Hilpert of Equicap negotiated the five-year loan at a 3.25 percent interest rate.
SPRING, VICTORIA and LUBBOCK, TEXAS — Cain Brothers has arranged the sale of three Lutheran Social Services of the South (LSSS) senior living facilities for undisclosed prices. A joint venture of Brookdale and HCP acquired two of the communities: The Village at Gleannloch Farms, a 206-unit continuing care retirement community in Spring, and Copperfield Village, an 86-unit independent living facility in Victoria. Prime Life Communities acquired the final community, Wedgewood South, a 49-unit assisted living facility in Lubbock. As a result of the transactions, LSSS was able to retire all of its outstanding debt and retain net proceeds to fund its mission.