“The city of Harrisburg gets tons of negative press, since the city is potentially in bankruptcy,” says Pierce. “That resulted in some investor skepticism. In reality, however, Harrisburg's suburban apartment market has strong economic drivers and quality school systems, and the financial challenges are contained within city limits.”

Investors have now become more “educated” about the market, Pierce says. “They are discovering it can offer a cash-on-cash return 100 to 200 basis points better than real estate in core markets,” he says.

Pierce and Mark Thomson are directors of M&M's National Multi-Housing Group in Philadelphia. They represented the seller of the Ivy Ridge Apartments, a local investor/developer, in this latest transaction and found the buyer.

“Quality assets in tertiary markets are still perceived as not quite as sexy as those in downtown Philadelphia,” Pierce says, “but we see markets that represent a much better option than buying overpriced assets in Philadelphia and Manhattan.”

M&M has sold about a dozen properties with more than 1,000 units in central Pennsylvania markets over the past few years, he says.

Ivy Ridge was built earlier this year on 12 acres located at 589 Yale St. in Harrisburg, Swatara Township. The complex is a half-mile from the Harrisburg Mall and two miles from downtown Harrisburg. Interstates 283 and 322 and the Pennsylvania Turnpike are also nearby.

“As the capital of Pennsylvania, Harrisburg provides its residents with many employment opportunities,” Thomson noted. “Other large employers in Harrisburg and nearby include Pinnacle Health Systems, Penn State Hershey Medical Center, and the tourist attractions in Hershey.”