ASHBURN, VA-Associated Estates Realty Corp. has acquired a multifamily property here for $90.3 million, or $179,000 per unit. Called the Ashborough, the class A property has 504 units with an average rent of $1,322 per month. The property is currently 97.4% occupied. Associated Estates funded the Ashborough acquisition with cash on hand and an unsecured line of credit, which had no balance drawn on it.
This is the second purchase the Richmond Heights, OH-based REIT has made in the DC are recently. In the spring it acquired Riverside Station in Woodbridge, VA for $54.3 million. These latest acquisitions, coupled with some properties it already owned in Baltimore, bring the total number of units it owns in Maryland and Virginia to 2,340 units across eight communities.
This acquisition, however, is likely to be the REIT’s last for 2010, according to a guidance it put out earlier this year. The guidance was between $100 million to $150 million. With these two deals, it has effectively reached the high end of that range, Jeremy Goldberg, senior director of corporate finance, tells GlobeSt.com. “It doesn’t mean we are not looking of course, but we are not planning any further guidance on acquisitions for the year.”
The two acquisitions are part of the REIT’s longer-standing strategy of diversifying some of its portfolio away from its Mid-Western roots. It has disposed of about 7,000 units in the Midwest over the past few years while making select acquisitions. “I would call it a repositioning of our balance sheet,” Goldberg says.
In general, REIT activity is picking up in the multifamily space as they shift from net sellers to net buyers, Ari Firoozabadi, vice president of investments at Marcus & Millichap, tells GlobeSt.com. “Buyers are underwriting corresponding rent growth for 2011 and 2012 as we recover from the effects of historic vacancies in 2009.”
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