(Read more on the multifamily market.)
NEWPORT NEWS, VA-An affiliate of Norfolk-based Harbor Group International LLC has sold a 208-unit multifamily property here for $24.1 million, two-and-a-half years after it acquired the property for $17.9 million. The 22-year-old Jefferson Point Apartments was sold to an affiliate of AEW Capital Management. Andrew Boyer and Dan Johnson of CB Richard Ellis represented Harbor Group both in this transaction and when the company acquired the property in March 2005.
"The price differential says volumes about values in this market and, at $115,865 per door, is a major record setter in price per unit for a property of this age," Johnson tells Globest.com. He adds the deal also is a reflection of the growing interest by institutional investors in such markets as Newport News.
"Not too long ago an institutional investor wouldn't have even looked at this market at all," Johnson says. "Even more recently, institutional investors wouldn't have looked at any assets here unless they were brand new class A." Jefferson Point is 95.7% occupied. Average rent for its mix of one and two-bedroom units is $923, Johnson says.
AEW might perform minor upgrades of the units, according to Johnson. It is also considering adding freestanding garages. "It is built to a fairly low density so there is room to do that." Other than those maintenance items, he says, "AEW is planning to ride the expected continuance of very handsome rent growth that has been prevalent in this market."
Drew White, senior director of the Capital Markets Group, Apartment Brokerage Services at Cushman & Wakefield, tells GlobeSt.com that there are a few multifamily projects expected to deliver within the year in the Newport News market. These new units, though, are sure to be easily absorbed in the market if the experience of Oxford Trails is any indication, he says. "That is a new class A building in Hampton, not very far away from Newport News. It had a phenomenal lease up."
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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.
