Hagerstown has enacted a development moratorium on anything more than 24 units, he explains, in order for its services and facilities, such as schools and sewers, to build enough scale. At the same time, though, the market is rapidly growing with an expansion at Hagerstown Airport, a $1.4 billion downtown redevelopment budget and an additional $4 million in highway expansions. "It's the perfect combination--high barriers to entry and a high growth market," Manesh says.

The Washington County portfolio consists of several class A communities in addition to large individually deeded town homes and entitled land. There are 333 stabilized units, which are 95% occupied, 216 units to be built and 336 under construction. Construction will be complete with a year.

Manesh says the firm has gone through a first round of offers already, with five proposals on the table. "We hope to have between seven to 10 deals by the end of the week." He expects the transaction to close in two phases, with the first deal consisting of the stabilized properties closing within the next two months. The second phase would close as the properties under development get their certificates of occupancy.

He says there has been significant interested in the portfolio as the Hagerstown market offers better cap rates than nearby Washington, DC. "With the compression of cap rates in top markets like Washington [DC] and New York [City], investors are going to secondary and tertiary markets," he says. Cap rates for multifamily properties in Hagerstown equal 6%, compared to 4.5% to 5% in DC.