BETHESDA, MD—New York-based Pantzer Properties has scooped up another DC area asset: The Monterey, a 432-unit, three building apartment asset located at 5901 Montrose Rd. The seller was a JV between Federal Capital Partners and Angelo Gordon. Pantzer Properties declined to discuss pricing but a source tells GlobeSt.com the property traded for $110.5 million, or approximately $256,944 per unit. The source also says the cap rate was close to 6%, clocking in around five-and-three-quarters. FCP did not return a call to GlobeSt.com in time for publication.
Public records show the property last traded in March 2008, when it sold for $97.2 million.
This acquisition, which Pantzer financed via its second strategic real estate fund (the company is currently raising funds for its third) represents the fourth asset it has purchased in the DC area over the last year. Last year, the company acquired six assets for a total of $360 million, co-president Jason Pantzer tells GlobeSt.com, three of which were in the region. Two were in Pentagon City and one was in Odenton, MD.
Pantzer tends to rebrand most of its acquisitions under The Point. However, Pantzer says it may well leave The Monterey with its current name as it has such great name recognition. In general, he adds, "we are delighted with the basis and the fact that we received a property that has been tremendously improved." Roughly half of the purchase price was said to be due to the renovation improvements.
The property is also very well positioned, close to Federal Realty's Pike & Rose project mixed-use project. "The Pike & Rose is highly complementary to The Monterey – it doesn't compete at all," Pantzer says.
For these reasons, Pantzer dubs the asset a value-add play for the company, but not a heavy lift. Not at all. "Some assets have a heavy lift when it comes to repositioning but with this one we believe we have caught it at just the right time. It is on the upswing and that is largely due to the investment put into the asset and its location."
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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.
