(To read more on the multifamily market, click here.)
LEXINGTON, MA-ING Clarion made its first Bay State apartment buy since 1999 with the $28.6-million acquisition of a 128-unit, fully leased class A apartment community here.Deke Schultze, with ING Clarion, tells GlobeSt.com that the property, known as Katahdin Woods, represented a value-added buy for the firm, known more for its acquisition of office properties than multifamily communities. "We anticipate that rents will continue to grow in the Lexington market due in large part to supply constraints," says Schultze. "We also feel employment is on the rise in the Lexington area, which bodes well for demand."
Set on 12 acres and surrounded by wooded conservation land, the 124,400-sf complex, located at 1 Katahdin Dr., features a swimming pool, fitness center, basketball courts and clubhouse. It is currently 100% occupied at rates ranging from $1,600 for a one-bedroom unit to $2,900 for a three-bedroom townhouse.
Biria St. John, with CB Richard Ellis' Boston office, represented the buyer with colleague Simon J. Butler. St. John tells GlobeSt.com that the property's key location sparked some tough competition among pension funds, REITs and value-added investors when its owner, an undisclosed pension fund, put it on the block.
"They recognized the value and the upside in the market, with Lexington and Waltham being a core office market," St. John notes. "They saw the upside in the continued growth of the office market and knew that the apartment market would benefit from that increased demand."
St. John says the acquisition, made on behalf of a core commingled fund advised by ING Clarion, "represents some good upside" for the new owners. The new owners, according to Schultze, plan to continue and expand on a renovation program to upgrade most of the units within the next two years.
ING Clarion's last apartment acquisition in Massachusetts was in 1999 when the firm purchased Museum Towers, a 435-unit luxury high-rise apartment complex in Cambridge, Schultze says. It then sold in 2004 for $146 million.
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