(Read more on the multifamily market.)
RICHMOND HEIGHTS, OH-Associated Estates Realty Corp. has purchased one multifamily property in Norfolk, VA and is buying another in Duluth, GA, as part of the Midwest-based company's move into the Mid-Atlantic and Southeast regions. The company looks to gain a 50-50 split of its ownership and management of properties in both the Midwest and Mid-Atlantic/Southeast.
The company has acquired the 268-unit Bristol at Ghent property, a four-story, mid-rise that was built in 2006. The building has amenities such as high ceilings, newer appliances, a parking garage and a clubhouse, and is about 80% occupied, says Michael Lawson, vice president of investor relations for the company. The rents range from $1,044 to $1,640 per month.
"We're excited about the Hampton Roads market, it's the strongest market in the region," he says. The cap rate for the purchase was in the 5% to 5.5% range with the pro-forma/net operating income model, Lawson says. He says he cannot disclose the purchase price, but says the asking price was north of $52 million.
Associated also is negotiating a deal to buy out its 51% partner in the 843-unit Idlewylde community in Duluth. The property has two clubhouses with pools, fitness centers, a water park and a media room with theater seating. The rents range from $715 to $1,085 per month. A public pension fund had wanted to buy the complex, Lawson says, but Associated had first rights to purchase the property.
Lawson says he can't comment on the sales price for the Idlewylde property. "We haven't closed on it yet," he tells GlobeSt.com. "It's a property worth $84 million, and our partner had a 51% interest," he says. He would not divulge the partner involved.
The purchases make up the company's desire to move into the Mid-Atlantic and Southeast market, Lawson says. The Bristol building is the first property bought by Associated in Virginia, though the company does have three properties in the Maryland/Washington DC area. "Our holdings are 60 percent in the Midwest area now, we're looking to grow that to a 50-50 split with the Midwest and Mid-Atlantic/Southeast area," Lawson says. With the Bristol buy, the company directly or indirectly owns, manages or is a joint venture partner in 99 properties, with a total of almost 20,000 units in 10 states.
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