205 Century Place in Alexandria
WASHINGTON, DC—WashREIT has entered into a definitive agreement to purchase a 2,113 unit multifamily portfolio for $461 million. The portfolio consists of seven suburban Class B apartment communities in northern Virginia and Montgomery County, MD.
The REIT, which plans to sell certain commercial assets to fund the acquisition, is focusing on aging millennials who can't afford home ownership or urban infill rents, according to CEO Paul McDermott.
This renter cohort is drawn to well-located, Class B suburban apartments because of their larger living spaces and strong community services, he added. Another factor: Research indicates 35-44 year old renter group is expected to grow significantly over the next five years, while supply is expected to remain in check in the suburbs. With development solidly focused on the urban core, the suburban Class B multifamily product will have strong fundamentals, McDermott said.
The multifamily portfolio consists of garden-style apartments located at 205 Century Place in Alexandria, VA; 13690 Legacy Circle in Herndon, VA; 2511 Farmcrest Dr., also in Herndon; 10519 Lariat Lane in Manassas, VA; 86 Heritage Way, NE, in Leesburg, VA; 2 Observation Court in Germantown, MD and 99 Watkins Mill Rd. in Gaithersburg, MD.
The portfolio, which is 95% occupied, is mostly Metro-accessible or will be when the Silver Line delivers in 2020.
WashREIT will renovate most of the portfolio and plans to increase rents with the upgrades.
The deal is expected to close in the second quarter of this year, potentially in multiple closings.
Its dispositions are expected to close in the third quarter. Meanwhile, WashREIT has term loan commitments for interim funding that will see the company through to the asset sales.
This purchase will increase the REIT's multifamily unit count by 50% to approximately 6,400 units, making WashREIT one of the larger owners and operators of value-add multifamily in the Washington Metro region.
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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.
