ST. CHARLES, MD. — An affiliate of San Diego-based Strata Equity Group has purchased an 11-property multifamily portfolio in Suburban Maryland for $302 million. This is the first purchase in the Mid-Atlantic region for the privately held firm.
Totaling 1,731 units, the properties are situated within St. Charles, a master-planned community roughly 30 miles south of Washington, D.C. The portfolio comprises Class A and B communities with an average unit size of 998 square feet. The buildings are 21 years old on average.
Renovations have been ongoing since 2014, and Strata plans to complete all remaining interior rehabs while making other capital improvements. Each property is part of a neighborhood association that provides residents access to a community center and recreational facilities such as swimming pools, tennis courts and playgrounds.
The seller, Federal Capital Partners (FCP), originally purchased the portfolio in 2009 for $43.6 million plus debt as part of its acquisition and privatization of American Community Properties Trust, which formerly traded on the New York Stock Exchange under the symbol APO. That acquisition included 11,000 residential units and 5 million square feet of commercial development, mostly in St. Charles and Puerto Rico.
FCP has been repositioning and selling portions of the APO portfolio for the past eight years, including 2,400 acres of residential-zoned land in St. Charles to Lennar Corp. for $53.7 million.
Other dispositions by FCP within St. Charles have included the $13 million sale of land to Competitive Power Ventures for the construction of its 725-megawatt natural gas-fueled power plant, and the $9.2 million sale of land to Aggregate & Dirt Solutions and Clean Earth of Greater Washington for industrial recycling purposes. FCP also sold an office building in St. Charles to an undisclosed buyer for $5 million.
CBRE’s Debt & Structured Finance team provided a $199 million Fannie Mae acquisition loan on behalf of Strata Equity. CBRE’s San Diego and Washington, D.C., offices worked together to originate the 12-year, interest-only loan.
Mike Muldowney and Michael Rudolph of CBRE’s Baltimore office represented FCP in the sale.
McLean, Va.-based Kettler Management was the property management firm for the portfolio during FCP’s repositioning process.
Chevy Chase, Md.-based FCP has invested in or financed more than $6 billion in assets since its founding in 1999. The privately held firm maintains ownership of five apartment communities and more than 288 acres in St. Charles that is zoned to accommodate 208 market-rate and 180 active-adult apartments, 160,000 square feet of neighborhood center retail space and more than 2 million square feet of heavy industrial use.
Founded in 1983, Strata Equity Group has more than $2.5 billion of assets under management. The company currently owns and operates approximately 18,000 apartment units across the United States and an additional 16,000 acres of land in Southern California that are in various stages of entitlement and development.
— John Nelson