(Mark Your Calendars: RealShare Apartments East, February 15th in Washington, DC).
ANN ARBOR, MI-With the multifamily market going gangbusters in just about every major market, the Detroit area is no different, but more subdued. However, the area around the University of Michigan in this small city has a big chunk of the region’s activity, such as Milwaukee-based Northwestern Mutual selling two large complexes to Chicago-based Habitat Co. for about $85.7 million.
The 360-unit Lake Village of Ann Arbor recent sold for $41.5 million to an affiliate of the Chicago-based Habitat Co. The property at 101 Lake Village Dr. has 18 three-story buildings built in two phases in 1997 and 2002. Northwestern Mutual sold the apartments, which are adjacent to the University of Michigan soccer complex. HFF and Pankhurst Properties represented the seller.
Another A2 complex, the 480-unit Windemere Park complex at 2820 Windwood Dr. sold for $44.2 million. THC Ann Arbor WP LLC, an affiliate of the Habitat Co., purchased the 24-year-old property from Northwestern Mutual. The property is about 98% occupied, and includes 80 one-bedroom and 400 two-bedroom units.
Rick Vidrio with Hendricks & Partners, who represented Northwestern on the Windemere Park deal, tells GlobeSt.com that the multifamily market in the Detroit area has been “night and day” compared to the past couple of years. “Deals haven’t been the giveaways they used to be,” he says. “We’ve definitely benefited from foreclosures. Ann Arbor has been doing well, this deal sold at a 6.98% cap rate compared to the average 8% or 9% cap rate in metropolitan Detroit.”
As opposed to other major markets, the Detroit area has a only a few redevelopment projects for multifamily in the works, and virtually no new construction. This light supply growth, coupled by a stabilizing automotive industry and firms moving jobs to Detroit, will allow landlords to implement rent gains this year, according to a fourth quarter Marcus & Millichap report. Vacancy in the market hit a decade low of 5.5% in 2011, according to the report.
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