Mystic Place in Medford, which is being purchased by Lend Lease Real Estate Investments for $66.5 million, is among the latest local apartment properties to change hands.
It may be difficult to top last year, but sales of multifamily assets have certainly gotten off to an active start in 2003, with several deals in Greater Boston having been consummated in recent weeks or fast approaching the finish line.
Among the latest apartment properties to change hands are Edgemere Green in West Roxbury, acquired by a local multifamily owner, and Mystic Place in Medford, which is being purchased by Lend Lease Real Estate Investments. Meanwhile, the Gateway Apartments property in Malden is said to be under agreement, with a closing anticipated for next month.
Lend Lease beat out a bevy of competitors to acquire Mystic Place for $66.5 million, broker Jonathan Close of the Nordblom Co. confirmed last week. “It’s a great property,” Close said of the complex, which is sited just north of Boston. “Where else can you buy 465 units so near Boston? … We had a great response.”
‘Good News’
Nordblom also brokered the sale of Edgemere Green to Chestnut Hill Realty, aka the Zuker family, which already has a presence in the market around West Roxbury. The 144-unit development traded for $17.2 million, or just over $119,000 per unit. “It’s in very good condition,” Close said, praising the former ownership, Tremont Ventures, another local private ownership. “The sellers did many upgrades to the kitchens and baths, and it is in a very strong location.”
Tremont chose to have Edgemere Green marketed quietly to a handful of likely buyers, rather than launching a broad-based search such as that conducted for Mystic Place. A leading seller of multifamily assets in Eastern Massachusetts, Nordblom received offers from a variety of capital sources for the Medford complex, which runs along the Mystic Valley Parkway. After a busy 2002, Close said there appears to be no letup of investor ardor for apartments as the second quarter kicks into gear. Besides the latest sales, Nordblom has already sold a 48-unit complex in Acton, a 280-unit development in Stoughton and 1848 Commonwealth Ave. in Brighton. That 69-unit property was acquired recently by the Mount Vernon Co. for $8.2 million.
One local investment specialist encouraged by the pace of activity is Biria St. John of CB Richard Ellis/Whittier Partners. Although some do continue to sit on the fence, St. John said an increasing number of apartment owners are considering selling in the current environment, reacting to the flood of capital chasing after multifamily assets throughout New England. One interesting aspect of the multifamily investment field last year was a lack of available product for sale in the region, with many owners opting to refinance and others reluctant to trade because they reportedly saw no alternative investments in which to steer their proceeds. That mindset appears to be changing, said St. John.
“There are a lot of people considering putting their [apartment] properties on the market right now,” he said, adding that “even if 50 percent of those deals happen, it’s going to be a lot more volume than there was” in 2002.
Marci Griffith Loeber of Cushman & Wakefield said she is noticing a similar trend. “You are definitely starting to see more people in the market,” she said. Her firm, for example, has been tabbed to sell the New England portion of Capital Properties’ extensive multifamily portfolio, a 5,300-unit fiefdom that runs along the eastern seaboard into Florida.
Griffith Loeber said the Capital offering has attracted a range of potential buyers in the brief time it has been on the market, although she declined to offer any names of potential buyers. “We have a ton of interest,” she said. Some sources claimed last week that Lend Lease is among those eyeing a portion, or all of, the portfolio.
Cushman & Wakefield is also brokering the sale of the Gateway Apartments in Malden. While Griffith Loeber would not provide details, she did acknowledge that the 203-unit complex, which also has a 36,000-square-foot office component, is under agreement. According to industry sources, Equity Residential appears to be the entity that has committed to the Class A property. Efforts to contact both Lend Lease and Equity officials were unsuccessful by press deadline.
Interest in the multifamily market resulted in such major sales last year at the Flatley Co.’s 4,300-unit New England portfolio, the 696-unit Gardencrest complex in Waltham and Longwood Towers in Brookline, a Class A apartment development in Brookline that sold for $80 million to Teachers Insurance and Annuity Association. That sale, brokered by Cushman & Wakefield, fetched a local record of $290,000 per unit, despite a regional multifamily market that had one of its worst years ever performance-wise.
According to Griffith Loeber, market fundamentals have begun to rebound, with occupancy levels on the rise and rental erosion beginning to stabilize. “It’s good news,” she said, particularly when one considers how solid the asset class was last year in the midst of deteriorating conditions. “The market is very active with both buyers and sellers wanting to make transactions happen before these [historically low] interest rates disappear,” said Close, with Nordblom currently negotiating two deals expected to change hands this month, and several more in the pipeline for the coming months.
