(To read more on the multifamily market, click here.)
INDIANAPOLIS-Core Realty Holdings LLC purchased AMLI at Riverbend, a 996-unit apartment complex, from AMLI Residential and its joint-venture partner in a sale that closed Oct. 28. Debbie Corson, principal of Apartment Realty Advisors of Ohio, tells GlobeSt.com that there were 10 offers from serious buyers vying for the complex. "Riverbend is a premiere property and well-known asset that was very much sought after," says Corson, who brokered the transaction.
Corson adds that Indianapolis, once primarily a market driven by regional and local buyers, is getting a lot more attention from a diverse group of national buyers. She credits several factors, including the improving local economy, job growth, lack of new apartment construction and shrinking apartment vacancy rates, in the swell in interest from buyers. "Indianapolis has been on a strong rebound for a while now," Corson says. "As jobs are created in the metro area, we'll continue to see the multifamily rental market recover."
Core Realty heard a similar story of recovery from several Indianapolis multifamily owners and managers it contacted prior to the acquisition. "They were all saying that they were starting to see some pretty substantial rent growth," Sterling McGregor, the company's chief investment officer, tells GlobeSt.com. The potential to grow rents is one of many key factors Core looks for when adding property to its portfolio, McGregor says. In general, the company prefers assets available at prices below replacement cost that are well-located in communities experiencing job growth and significant infrastructure improvements.
Both McGregor and Corson declined to release the sales price. However, McGregor says that while the overall price was significant, the price per unit made it an attractive buy for Core Realty. "Our lender who provided the financing said it made several loans in the market (that added up) to our purchase price," he adds.
Riverbend, one of the largest apartment assets in Indianapolis, was built in phases from 1982 to 1986. A $7.2 million renovation of the complex, commenced in 1998, was completed in mid-2001. Complex amenities include easy access to retail and major transportation routes, covered parking, internet access, a fitness center, and aerobics, tennis and racquetball courts. In fall 2005, AMLI Residential sold a 60% interest in the property to Tuckerman Group LLC of Rye Brook, NY.
Core plans to acquire $600 million in assets this year, according to McGregor. In another recent Midwest acquisition, the company purchased more than 500,000 sf of office space in the Brookfield Lakes Corporate Center on Bluemound Road in Brookfield, WI, for $80 million. McGregor says the company also is under contract to purchase another building in the park, which would bring the total acquisition to $93 million. In June, the company purchased 2,400 apartment units in North Carolina and Virginia for $190 million.
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