Cushman & Wakefield of Massachusetts has been retained by the Mullins Cos. to sell Kimball Court, a 781-unit apartment complex off Route 128 that straddles the Woburn/Burlington line.
New Xboxes aside, few items are selling more ravenously these days than multifamily real estate, and investors now have more options available for their holiday shopping list, including one of New England’s largest apartment communities and the residential portion of a 38-story, mixed-use project planned for Boston’s Longwood Medical Area.
“We’re excited about it,” Cushman & Wakefield of Massachusetts principal Marci Griffith Loeber said last week in confirming that her firm’s Capital Markets Group has been retained by the Mullins Cos. to sell Kimball Court, a 781-unit apartment complex off Route 128 that straddles the Woburn/Burlington line. Ranked in the top 10 in number of apartment units in Greater Boston, the development consists of two separate assets, the three-building Kimball Court and Kimball Woods, a twin-tower, 256-unit luxury complex now under construction.
Loeber said she anticipates the properties will be sold together, adding that the deal could extend into 2006. While she would not provide specifics, one estimate placed the sales target at $170 million, or roughly $220,000 per unit. Loeber would only say that she expects Kimball Court will be widely sought after given the sheer size of the property, quality of construction and the desire among investors for multifamily product.
“To get something like this on Route 128 is a tremendous opportunity,” said Loeber, predicting that pension funds and other institutional money will be active participants in the bidding process. Buyers interested in a condominium conversion might also eye Kimball Court, acknowledged Loeber, adding the complex could lend itself to a hybrid of rentals and condos. Between last year and into 2005, condo converters have been the most aggressive on pricing for multifamily, but Loeber noted that the institutional sector has stepped up to the fore of late, as evidenced in the pending sale of the Village at Quarry Hills in Quincy to Archstone-Smith. The real estate investment trust is expected to pay $110 million for that 326-unit apartment community, beating out several companies who viewed the luxury project as a conversion play.
‘A Great Opportunity’
The Cushman & Wakefield Capital Markets Group also is negotiating the sale of Quarry Hills, and previously this year sold another major multifamily development in Waltham, Longview Place, acquired by Equity Residential for $109 million. Even with some concerns beginning to be heard in investment circles on the long-range health of the multifamily arena, Loeber said capital remains committed to Greater Boston. “For the right product in the right location, it will sell,” she said. Although the sale of Charles River Park several years ago topped $200 million, Loeber said Kimball Court will likely be among her investment team’s largest apartment deals in more than 10 years of working together. Other members of the team include Robert E. Griffin Jr. and Edward C. Maher Jr., while Brian R. Doherty recently signed on as well, participating in the Longview Place negotiations.
Loeber was unable to speak on another rumored assignment for the Capital Markets Group, with sources last week claiming that Cushman & Wakefield has been selected to sell the development rights for 150 residential units in the Longwood Medical Area at One Joslin Place. The transaction would involve a 29-story residential tower to be grafted atop a 9-story research building proposed by Children’s Hospital and the Joslin Diabetes Center. It is unclear what the value of the residential portion would be, but sources insisted the developers are trying to peddle that opportunity. Officials at Boston Properties, which is assisting the hospitals in their endeavor, were unavailable to comment on the rumors of a sale or say whether a broker has been hired.
If it does hit the market, One Joslin Place will join a variety of multifamily assets on the block. “There’s a mixed bag of deals out there,” acknowledged Jonathan Close, a principal with Apartment Realty Advisors of Burlington whose firm is peddling a 165-unit Randolph apartment complex on behalf of Equity Residential. While he would not give details, Close said his multifamily sales team has a variety of other residential offerings in play, including permitted land sites for new construction and existing assets initially developed by private companies and now being chased by public capital. Brisk for the past several years, the velocity of apartment sales is about three to four times above the norm in 2005, said Close, who cited the large cadre of investors for luring a growing number of owners off the sidelines.
Constructed between 1988 and 2003, Kimball Court was one of the first properties in Massachusetts allowed under the state’s Chapter 40B housing statute, which lets residential projects supersede local zoning if certain housing affordability requirements are not met in the community. Consisting of 525 units in three buildings, Kimball Court overcame a major court challenge, and is now considered one of the prime apartment communities north of Boston. The Mullins Cos. subsequently received approvals for the adjacent Kimball Woods, which is slated for completion next year. The firm also has several other apartment developments in Greater Boston, including Mass Mills in Lowell.
As for the Randolph opportunity, Close said he also anticipates a number of investors will respond. Tyrone Gardens has both a solid location and is in a medium-range rental class that keeps occupancy consistently strong, said Close. “It’s a great opportunity for an investor to purchase housing very near to Boston, but [offer] reasonable rents as well,” he explained.
