Continental began selling off its multifamily assets in 2006. "I don't know if that was ever one of their primary businesses," Nick Matt tells GlobeSt.com. Managing director of Holiday Fenoglio Fowler LP, which is marketing the property for the JV, Matt adds, "They built apartments primarily in conjunction with their retail developments," such as the Waterfront MXD.
More recently, Matt says, Columbus, OH-based Continental has been focusing more on "core competencies and property groups, and I think they'd probably say that's retail and office to a certain extent." Matt is confident that the Waterfront multifamily asset, which consists primarily of rental units, will find a buyer quickly.
"We have a couple of things going for us," he tells GlobeSt.com. "Number one, occupancy is strong"—currently at 97%, according to a news release from HFF. "Also, there's a real opportunity to raise rents, because right now, demand is outstripping supply. With the crisis enveloping single-family housing, residents are just not able to finance single-family properties and so the market is moving more toward rentals."
That goes for investment sales as well, Matt says. "On the investment side, people still have money that they need to put to work, and buying retail or office properties right now is very dicey in terms of getting those deals financed," he says. "Despite all the recent negative press, Fannie Mae and Freddie Mac are still very active on the multifamily financing side."
The JV is marketing the Waterfront multifamily property without an asking price. However, Matt tells GlobeSt.com he believes the property will command "about $100,000 per unit," or approximately $23.5 million. It was completed in 2001, and features one-, two- and three-bedroom units and townhomes averaging 1,049 sf each.
Continental sold the retail portion of the Waterfront MXD in 2003 to Inland Retail Real Estate Trust for $123.5 million. The Waterfront MXD was in turn part of Developers Diversifed Realty's $6.2-billion purchase of Inland in 2006.
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Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
