(Read more on the multifamily market.)
GLEN MILLS, PA-Villanova-based Red Rocks Group has acquired Coventry Crossing, a 244-unit multifamily complex at 512 Coventry Ln., from Chester Heights Associates LP for $41 million at a cap rate of 5.7%. The complex was built in 1985 and occupies 25 landscaped acres.
The new owner plans a significant capital investment in order to “position the property as a luxury complex with a country-club feel,” says Ken Wellar, a multifamily investment specialist in the Philadelphia office of Marcus & Millichap. Wellar represented the seller and procured the buyer. The upgrades include complete renovation of units and the exterior, and plans also call for the addition of a fitness center, clubhouse and onsite putting green.
The asset, which encompasses 25 buildings, is currently 93% occupied. Each building typically has 10 units, and all units have a washer/dryer, cathedral ceilings, private entrance, a patio or balcony and two parking spaces. There are one- and two-bedroom layouts, many of which include a den, and they range in size from 810 sf to 1,486 sf. Current rental rates span from $960 a month to $1,630 a month, according to Wellar.
The price tag translates to $168,032 a unit, which is more than twice the median sale price for multifamily assets throughout Greater Philadelphia, according to a second-quarter multifamily report from Marcus & Millichap. It puts the median at $71,000 a unit and says that represents a gain of 11% over the previous 12-month period. According to the report, the vacancy rate here in Chester County is 3.3%.
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