Image courtesy Colliers International
Cooperative housing ownership structures are common in New York City but rare in Boston, and even harder to find in Massachusetts’ suburbs.
One such example is located in Westborough, where 21 three-story buildings are spread across a 15-acre site known as the Park Village West Cooperative. The property recently became available via Colliers Boston, which is marketing the majority ownership share to potential buyers.
Originally completed as apartments in 1969, Park Village West was converted into a co-op structure decades ago, according to Colliers Executive Vice President Chris Sower.
The current owner, Natick-based Stonegate Group, acquired 214 of the 252 units from another investor and individual residents and now is selling its 83.5 percent ownership share. The new owners will have the opportunity to buy the remaining shares and complete the transition to a pure apartment model, Sower said.
The COVID-19 pandemic has injected a new element of uncertainty into multifamily markets, but some research indicates that suburban properties are benefiting from renters’ second thoughts about urban living.
A report released this week by Apartment List found that searches declined 20 percent in the city of Boston during the second quarter, while searches in other Greater Boston cities rose 6 percent and those to other states rose 30 percent.
“We’ve been tracking everything closely and it’s a bit of a moving target in COVID, but we’ve seen the suburbs benefiting with some of the population trends,” Sower said, noting that occupancy at Park Village West has remained stable and tenants are renewing at average rent increases of 5 to 6 percent. “People are staying in place and renewing. They’re not moving because it’s a challenging environment.”
The co-op ownership structure for multifamily properties has some similarities to a condo association, such as the requirement that residents contribute to common area expenses. Unlike condo owners, co-op residents receive shares in a co-op corporation based upon the size of their unit, and sign leases rather than receiving deeds.
The current owners have invested over $4 million in capital improvements including a new clubhouse building and swimming pool, but Colliers is marketing the property as a value-add opportunity to increase rents through additional upgrades. The property has $1.9 million available in reserves available, which can be used for additional capital improvements and common area upgrades, Sower said.
“For all intents and purposes it operates daily like an apartment community,” he said.
