Fairfield Residential LLC of San Diego has paid $21.3 million for the Ashford Crossing apartment complex in Shrewsbury.
Capping off an active year for multi-family sales, a leading real estate investment trust has purchased Ashford Crossing, a 180-unit apartment complex located just off Route 9 in Shrewsbury. Fairfield Residential LLC of San Diego paid $21.3 million for the property to BlackRock Realty.
“This is a good example of national firms being active in this market and their willingness to compete for high-quality assets such as [Ashford Crossing],” said Jonathan Close of Apartment Realty Advisors-New England, whose Burlington office of the Apartment Realty Advisors network brokered the transaction on behalf of BlackRock. As part of the deal, Fairfield also acquired permits for 108 new units to be built at the property, providing the firm an opportunity to further enhance the investment. Built in the 1970s, Ashford Crossing has been recently renovated, said Close, and features a new clubhouse, pool and fitness center.
The Ashford Crossing purchase marks the third apartment complex Fairfield has acquired in New England in recent weeks, with the REIT paying $34.7 million for Countryside Village in Manchester, N.H., and securing another asset in Rhode Island. Also brokered by ARA New England, the New Hampshire purchase from Stone Ends Apartments includes 448 units in 17 buildings, giving Fairfield control of one of the Granite State’s largest apartment communities.
A Solid Year
The pair of late-season deals provided Close and other members of ARA New England with another solid year in selling apartment properties. Prior to those two completions, the firm negotiated such deals as the $30.7 million sale of the Bayshore in Quincy, the $41.3 million disposition of Hawthorne Commons in Salem, and one of the area’s top residential transactions of 2005, the sale of 517 prime Boston apartments for $90 million, a deal that included several buildings in the city’s Fenway and South End neighborhoods. ARA New England brokered just over 2,000 apartment units and the $7.8 million sale of land at the Pine Hills in Plymouth in 2005, putting the group’s sales volume up at the $300 million mark. The national parent, Apartment Realty Advisors, handled more than $8 billion in apartment sales in 2005 through its 13 offices, including the New England contingent
In assessing the year, Close said the biggest factor in the region was the continued dominance of institutional capital. While local players were able to secure some properties by pursuing conversion to condominiums, enabling them to compete on price, pension funds and other national funding sources led the field, aided by access to cheaper money and the ability to accept lower returns on the properties they did acquire.
One of the biggest multifamily deals this year involved the purchase of 326 units in Quincy by Archstone-Smith, a real estate investment trust that observers said was more intent on attaining market share on Boston’s South Shore than quibbling over returns. As a result, the REIT beat out several other aggressive buyers, including some who were interested in a condominium conversion plan for the complex, the Village at Quarry Hills. Estimated at about $110 million, that sale was brokered by Cushman & Wakefield of Massachusetts, which also sold a Waltham apartment property to Equity Residential, one of the nation’s largest apartment REITs.
Close said he believes the institutional sector will again be a force locally in 2006, with multifamily still regarded as a safe haven for investment and one that offers a relatively solid yield compared to alternatives. ARA New England is carrying several assignments into the new year, including Tyrone Gardens in Randolph, a 165-unit apartment complex it is marketing for Equity Residential.
Local investors will again be active in the condominium conversion market in 2006, said Close, who added that he believes such players understand the area enough to make such opportunities work even in facing the prospect of rising interest rates and questionable demand. Sales of entry level condominiums remain strong, said Close, predicting that savvy converters will target first-time homebuyers seeking units in the $250,000 range vs. the luxury approach seen throughout Boston in recent months.
As for Fairfield, the REIT has had a presence in Greater Boston for several years, but does appear to be picking up its interest in the market. “They are a very good group, and they clearly know what they are doing,” said Close, maintaining that the firm’s growing presence signals continued confidence in Boston on the multifamily front. Fairfield already owns apartment communities in Ashland, Plainville, and Tewksbury. The REIT is ranked consistently in the top 25 apartment owners in the country, now controlling more than 42,000 units nationally following the deals in Shrewsbury and New Hampshire.
