Nordblom Co.’s Multifamily Sales Team, which has joined the national network known as Apartment Realty Advisors, recently completed the $26.7 million sale of this 275-unit apartment complex in Marshfield.
Nordblom Co.’s Multifamily Sales Team is going national, but the Burlington-based group will remain in the shadow of Route 128. Fresh off a record-breaking 2003, the division has joined Apartment Realty Advisors, a partnership that last year sold $3.2 billion of multifamily properties throughout the United States.
“They are absolutely the best brokers in each marketplace,” said Nordblom principal Richard P. Robinson, citing a reliance on cooperation and technology as reasons his firm jumped on board when approached by Denver-based ARA. The philosophy values local expertise, Robinson explained, allowing Nordblom to concentrate on the region where the outfit has made its mark.
“It’s very exciting to be part of the organization,” said Jonathan Close, Nordblom multifamily specialist, who leads what is now ARA New England. “Each one of their offices is very successful.” The Nordblom contingent is proving its own mettle, having just completed two sizeable deals, including the $26.7 million sale of a 275-unit apartment complex in Marshfield.
ARA officials maintain that just being invited to join their group reflects well on Nordblom’s standing, stressing in company literature that they only pursue “the premier, top-producing, exclusively focused apartment brokerage team in its market.” That would seem especially noteworthy in the Bay State, which boasts a stable of experienced multifamily brokerage houses.
CB Richard Ellis/Whittier Partners, NAI Hunneman Commercial Co. and Cushman & Wakefield all have been active peddling apartment properties, achieving record pricing and transacting major deals as capital continues to target New England’s apartment stock. C&W sold one Brookline complex for nearly $300,000 per unit, while Meredith & Grew/Oncor brokered the landmark $500 million sale of the Flatley Co.’s 3,200-unit portfolio to a Denver real estate investment trust in 2002.
Although other Hub firms could likely measure up to ARA’s strict standards, few could argue against Nordblom being the regional designee. The firm brokered more than $320 million of apartments in 2003, among them the $66 million sale of Mystic Place in Medford, Home Properties of New York’s $34 million purchase of the Stone Ends apartments in Stoughton and the disposition of a 240-unit complex in Milford, N.H., that fetched $14.8 million.
“The listing gods have been good to us,” Close said of his group’s performance, one that the company says placed it first in New England for apartment sales brokerage in 2003. The volume is especially impressive in an area where multifamily sales opportunities are hard to come by due to limited investment-grade inventory and a reluctance among owners to put their properties on the block.
‘The Client’s Interest’
Sporting nearly 15 years of experience each in the field, Robinson and Close have watched the area’s multifamily brokerage industry evolve from a sector controlled by private, often unsophisticated ownership into one that is attracting a surge of aggressive capital from pension funds, real estate investment trusts and other public vehicles. That, in turn, places additional responsibilities on brokers to adequately assist such capital sources, said Close, with real-time research and the ability to operate in multiple markets increasingly critical to success.
“Our best opportunity to service those institutions on a national basis is by using the most experienced people in the country, and that’s the whole idea of joining ARA,” said Close, whose firm will continue to be an affiliate of Nordblom, yet operate under the ARA brand as a shared owner of the network.
Launched in early 2003 by several leading apartment brokers in the Southeast, ARA has offices in Houston, Dallas, Atlanta, Florida, Ohio, the Carolinas and Colorado, while there are efforts ongoing to establish offices in Washington, D.C., and southern California. ARA is slowly building its partnership because it wants to ensure there are no weak links, said Robinson, who also praised the ARA fee structure, one designed to foster teamwork among the different offices.
ARA brokers concentrate on deals within their own region, accepting referrals from other offices and then handling all aspects of the assignment. Not only does that draw on the parochial knowledge of the brokers, Robinson said, but there is also no element of fee sharing.
“The client’s interest is to get the most competition and get the highest price,” said Close, a goal best achieved by having a local broker beat the bushes and reap the rewards. If it works, “we get a happy client and we get more clients that way,” he offered.
“It’s a new business model that we don’t see anyone else doing,” said Robinson. According to ARA, traditional real estate networks “lead to protected resources and reduced incentive to work on a client’s behalf” by requiring them to split proceeds. ARA brokers are incented to give it their all, drawing on the best buyers and offering clients an enhanced level of market research and other resources because they will capture the rewards.
Nordblom was equally impressed by ARA’s technology, centered around a state-of-the-art Web site that allows buyers to review more than $2 billion of apartment properties. Clients with listings also have access, providing updated information on the bidding for their asset and progress in completing a sale.
“It’s a very unique interface,” said Robinson, one that will further help Nordblom in an industry that increasingly requires hefty technology investment to compete. Such a benefit had been touted to Nordblom by several national real estate firms that had sought to acquire the Multifamily Team. Robinson said the firm turned them down due to concern about autonomy.
“We just decided we wanted to remain entrepreneurial and independent,” said Robinson, adding that the ARA approach will let Nordblom retain those elements.
As for 2004, Close said the biggest challenge is finding investment-grade properties to list. “It’s still a skinny inventory,” he said, but expressed optimism that owners will begin to recognize the glut of capital available for apartments, money that could be quickly shut off should interest rates begin to rise.
The current ardor can be reflected in the two deals just brokered by ARA New England. Besides the Village at Marshfield, acquired by Home Properties, ARA New England Vice President Terry Scott brokered the sale of the Stone Terrace Apartments in Manchester, N.H., to a condominium developer.
“This is one of the largest condo conversions in New Hampshire in over 20 years and is indicative of the current hot condo market,” said Scott, a longtime member of Nordblom’s multifamily practice who concentrates on the Granite State market. Scott attributed the fervor to low mortgage rates and a shortage of medium-priced housing. Stone Terrace sold for $15.1 million.
Joe Clements may be reached at jclements@thewarrengroup.com.
