(To read more on the multifamily market, click here.)
GREENBELT, MD-The Bozzuto Group has acquired a class B multifamily property in Ft. Washington for $16.4 million. Called River Pointe, Bozzuto bought the nine-acre, 170-unit complex from Boone Properties.
CBRE's Bill Roohan and Mike Muldowney brokered the deal, representing the Bozzuto Group. Financing was arranged through IXIS Real Estate Capital by CBRE/Melody's Maury Zanoff and Joseph Donato. The cap rate was a little more than 6.5% on 2006 and almost 7% first year pre forma, according to Ryan Ogden, senior vice president and director. Ogden headed the acquisition team.
This is the eighth multifamily acquisition the firm has made this year, taking a total of 2,835 units, according to the firm. This year's activity has nearly doubled Bozzuto's Mid-Atlantic multifamily holdings; Bozzuto now has acquired a total of 5,788 units over a period of five years.
Ogden tells GlobeSt.com that the company takes one of three approaches for its acquisitions: a classic renovation/repositioning taking a building from, say, B minus to B plus; a management makeover in which the firm tweaks operations of a well maintained building that has not been performing well for other reasons; or a hybrid of these two approaches.
River Pointe, which is an example of the management makeover strategy, does not require much in the way of upgrades--perhaps $1 million, Ogden says. The company does not plan to raise rents, which range from $900 to $1,300 per unit, either. "Our strategy is to hold it for the mid-term and look for opportunities to do more renovations the longer we own it," he says.
The building, which has 17 one-bedroom, 84 two-bedroom, 51 three-bedrooms and 18 four-bedroom units, is about one mile from I-495 in Prince George's County.
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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.
