(To read more on the debt and equity markets and the multifamily market, click here.)
BETHESDA, MD-GlobeSt.com has learned that Meridian Capital Group's local office is working on a multifamily acquisition in the suburbs that is "between the contract and closing stages," says Andrew Weiss, managing director of the office here. The firm is raising both debt and equity. It is an older apartment project purchased at below replacement cost but at an aggressive cap rate, Weiss says. "The buyer will put money in and then raise the yield."
In general, multifamily's performance in the DC market continues to be very strong. Like many other markets, the DC multifamily sector has benefited from the high number of condo conversion projects, Weiss observed. "When supply is reduced, naturally, the remaining inventory becomes more valuable."
According to the National Association of Realtors' Commercial Real Estate Outlook, at 2.6%, Washington, DC ranks seventh out of 15 markets forecast to have the lowest vacancy rates for 2006. NAR also estimates that almost 78,000 multifamily units will be absorbed nationally in the first quarter of 2006. Of these units, 20% will be split evenly between Chicago and the DC markets.
In short, Weiss says, institutional interest in the Washington area real estate market remains very robust and it is not limited to the multifamily sector. For instance, Weiss is currently raising capital for a DC-based office property. "There are a lot of examples to show how strong the office market in DC continues to be. Price per foot being sold, as one example, has hit record highs. Leasing rates remain strong. It is a good time for sellers."
Headquartered in New York City, Meridian has traditionally had a strong multifamily focus. In the Washington, DC-area Meridian has completed, or is in the process of completing, $250 million in deals thus far this year in this category, according to Weiss.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
