Royal Crest Estates in North Andover is one of 11 apartment communities recently sold by Braintree developer Thomas J. Flatley to Denver-based Apartment Investment and Management Co. for $500 million.

If Terry Considine were willing to take “no” for an answer, the biggest apartment sale in New England’s history might never have taken place.

As Apartment Investment and Management Co. puts the finishing touches on the $500 million deal, which was first reported by Banker & Tradesman, seller Thomas J. Flatley recounted last week how AIMCO’s president approached him several months ago with high praise for the Braintree developer’s 4,200-unit portfolio, an 11-complex block of garden-style and mid-rise apartments located in the Bay State, as well as New Hampshire and Rhode Island.

“I said, ‘We think they are pretty good, too, and we intend to keep them,'” Flatley recalled. “We said they are not for sale.”

It was the same response Flatley had given numerous other suitors who have inquired about purchasing the portfolio in recent years, but somehow, Considine persisted and ultimately won Flatley’s ear. While the industry icon had $500 million good reasons to accept the buyout from the Denver-based real estate investment trust, Flatley attributed his decision more to an innate sense that AIMCO would be the right fit to take over the operation.

“We were very impressed,” Flatley said, citing AIMCO’s professional due diligence program and a strong level of respect for both the residents of the developments and the employees, a large number of whom AIMCO has already expressed interest in hiring. Although some industry observers have suggested the portfolio would have garnered a better price by being put on the market, Flatley said he never would have pursued a sale under that environment.

Considering how long he resisted a sale, the initial deal with Considine was hammered out in barely an hour, while a follow-up with the attorneys took just four hours to complete. That, Flatley said, was an indication he had made the right decision. And while he acknowledged that this particular sale is more emotional than when he disposed of his hotel portfolio five years ago, Flatley said he came to the conclusion that a sale made sense.

“When you hold something a certain amount of time, you have to be careful you don’t become too passive,” he said. “There comes a time when you just feel it’s right to move on.”

On the flip side, AIMCO officials apparently did little soul searching in opting to pursue the Flatley portfolio, with Considine explaining in a conference call last week that he has had his eye on the apartments for years. His real estate career began in the Hub 30 years ago, Considine said, and he has followed news of Flatley’s achievements ever since.

“Tom Flatley was much admired then, and he’s a legend now,” Considine said, adding he is particularly impressed by the employees of the Flatley organization.

As for the properties themselves, Considine cited their “meticulous condition” and superior locations in major metropolitan markets. “The properties are, in my opinion, irreplaceable,” said Considine, noting they range between 75 and 120 acres with substantially low units-to-acreage ratios. “Such properties simply no longer exist undeveloped.”

The acquisition also ramps up AIMCO’s presence in Southern New England virtually overnight, and reflects continued interest among national apartment players in the region. According to Thomas Meagher of Northeast Apartment Advisors, Boston remains one of the five leading markets on which investors and apartment real estate investment trusts are focusing at present. Meagher added that the Flatley deal also reflects continued consolidation of the apartment sector, a trend he anticipates will continue.

‘Professional’ Ownership

As for the sale itself, Meagher maintained that all parties will benefit from the agreement. Not only does AIMCO immediately become one of the top five multifamily players in the region, Meagher said he believes Flatley received a strong price for his portfolio, particularly considering it will be an all-cash deal. As for the residents, Meagher predicted they would fare well under AIMCO’s stewardship.

“The bottom line to me is, it’s an excellent deal for everybody,” Meagher said. “I don’t see any losers at all.”

In the conference call, Considine estimated the portfolio is being acquired at a discount to replacement cost of 25 percent, adding that the sheer size of the holdings will help increase AIMCO’s efficiency and cost in running the properties. He concurred with Meagher that the company has been pursuing a geographic diversification program that had targeted New England, adding, “this investment is exactly consistent with AIMCO’s policies.”

The 11 apartment communities include Waterford Village in Bridgewater, Georgetown and Granada Apartments in Framingham, Vantage Pointe in Swampscott and the Royal Crest Estates in North Andover. The overall occupancy level is 94.2 percent, with North Andover’s vacancy rate up around the 10 percent range, according to Flatley, who cited Lucent Technologies’ recent woes as a prime reason for the open spots at that property.

Nordblom Co. Vice President Jonathan Close, a specialist in the multifamily market, said he also believes the Flatley sale was a solid deal all around, although he is among those who maintain it might have fetched considerably more were it put out to bid with other competitors. In any event, Close said it continues the trend towards institutional ownership of the region’s apartment sector, one previously dominated by mom-and-pop operations but now garnering interest from such groups as AIMCO.

“That’s a real big change,” Close said. “It’s going to create a very professional apartment market here.”

Even though Flatley said the current investor ardor for multifamily properties was not a reason for his sale, Close said other owners may take his lead and put their properties on the block. Meagher said there are no indications of such a movement, but agreed that there are 10 to 15 private groups with portfolios of between 500 and 1,000 units that may determine the climate is ripe for divestment.

“I’m sure they are being contacted on a regular basis, and I’m sure all of those guys are looking at Flatley and wondering what it all means to them,” he said. Interestingly, Meagher was one of the developers of AIMCO’s main holdings in the region, Bay Ridge in Nashua, N.H., a 412-unit asset he said has been run professionally since the REIT took over the complex.

As for Flatley, while he said he considered his apartments “the backbone” of his empire, he noted he still has 8 million square feet of retail and office space and said he will continue to pursue new deals if they become available. “I will stay in the real estate business,” he said, explaining he still enjoys the ability to touch his investments.