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Monday, 08 April 2019

Washington REIT Buying Portfolio of Suburban Washington, D.C., Apartments for $461Mln

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Commercial Real Estate Direct Staff Report

Washington REIT has agreed to pay $461 million for seven apartment properties with 2,113 units in the Washington, D.C., suburbs of Maryland and Virginia.

The company is buying the properties from a venture of Pantzer Properties Inc. and Dune Real Estate Partners, which had acquired them in 2011 as part of a larger portfolio for which it paid $460 million. Pantzer and Dune are both New York investment managers.

That portfolio had one other property, the 467-unit Point at River Ridge in Ashburn, Va., that the Pantzer/Dune venture had sold in 2014 for $89.5 million to Klingbeil Capital Management of Columbus, Ohio.

Washington REIT owns 19 office buildings with 3.7 million square feet, 16 retail centers with 2.3 million sf and 13 apartment properties with 4,268 units. It plans to sell some of its retail and office properties in order to fund its latest acquisition, which is expected to be completed by the end of June.

The pending deal would increase the size of the company's apartment portfolio by 50 percent to roughly 6,381 units, while reducing its exposure to the office and retail sectors. The company has considered selling its retail portfolio, but has selectively acquired office properties in order to upgrade its portfolio's profile. Last year, for instance, it bought the 398,000-sf Arlington Tower office building in Rosslyn, Va., and before that the Watergate 600 office building, with 309,387 sf at 600 New Hampshire Ave. NW in Washington, while selling the Braddock Metro Center in Alexandria, Va., and 2445 M St. NW in Washington.

Since 2013, the company has invested $533 million in the acquisition of apartment properties and generated $992 million of proceeds from the sale of office and retail properties.

Paul McDermott, Washington REIT's chief executive, said the apartment properties it is buying target tenants who are in their 30s and 40s and cannot afford to buy single-family homes or rent class-A apartments in downtown areas.

The properties are near public transportation and in areas with good school districts. They are aimed at renters with annual salaries of between $50,000 and $80,000. Monthly rents range from $1,250/unit to $2,000/unit.

"Our research indicates the 35-44 year old renter cohort is expected to grow significantly in the next five years, while supply is expected to remain in check in the suburbs. Development is solidly focused on the urban core," he said.

The portfolio, which is 95 percent leased, consists of:

- the 532-unit Point at Alexandria, at 205 Century Place in Alexandria;

- the 328-unit Point at Dulles, at 13690 Legacy Circle in Herndon, Va.;

- the 283-unit Point at McNair Farms, at 2511 Farmcrest Drive, also in Herndon;

- the 408-unit Point at Bull Run, at 10519 Lariat Lane in Manassas, Va.;

- the 134-unit Point at Leesburg, at 86 Heritage Way NE in Leesburg, Va.;

- the 218-unit Point at Germantown, at 2 Observation Court in Germantown, Md.; and

- the 210-unit Point at Watkins Mill, at 99 Watkins Mill Road in Gaithersburg, Md.

Comments? E-mail Tim Casey or call him at (267) 397-3347.



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“The Weekly” is Commercial Real Estate Direct’s PDF newsletter, sent to subscribers every Friday morning. With over 100 news stories published on Commercial Real Estate Direct each week, “The Weekly” features the top stories in commercial real estate that industry participants need to know first. “The Weekly” also contains:

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Additional Info

  • Syndicate to Realpoint: No
  • Cities: Washington
  • States: District of Columbia
  • Sector: Multifamily
  • Subject: Property Acquisitions (ACQ)
  • Company: Washington REIT
  • Valuation: More than $150 million
  • Private: No
Read 422 times Last modified on Wednesday, 10 April 2019

Data Digest

 

CMBS DELINQUENCY VOLUME

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CMBS SPECIAL SERVICING VOLUME

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Top Bookrunners Domestic, Private-Label CMBS - 2017
Investment Bank #Deals Vol$mln MktShr%
Goldman Sachs 17.59 11,819.34 13.68
JPMorgan Securities 14.52 10,968.11 12.70
Citigroup 12.04 10,012.71 11.59
Wells Fargo Securities 14.02 9,936.06 11.50
Deutsche Bank 12.55 9,879.74 11.44

 

RCA CPPI

 

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CMBS 2.0 Spreads

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Top CMBS Loan Contributors - 2017
Lender #Loans Vol$mln MktShr%
Goldman Sachs 146.89 11,719.34 13.63
JPMorgan Chase Bank 117.68 10,114.14 11.76
Deutsche Bank 198.48 9,689.97 11.27
Morgan Stanley 166.18 8,539.78 9.93
Citigroup 199.05 8,088.24 9.41

 

 

 

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