Barrows Place in Allston is among the properties recently sold by Forest Properties of Newton. Greater Boston’s multifamily market has seen a flurry of apartment sales of late.
For a multifamily market considered far undersupplied, there seems to be no letup in the parade of apartment properties changing owners in Greater Boston, with three sales totaling more than $225 million being wrapped even as a new wave hits the trading block, headlined by a year-old luxury apartment complex north of Boston in Georgetown.
“It’s as hot as anything right now,” Cushman & Wakefield of Massachusetts President Robert E. Griffin Jr. said last week of multifamily sales activity. Besides being given the assignment to peddle the 186-unit Georgetown complex, Griffin’s firm just sold a Fenway apartment building to the Hamilton Cos. for $26 million and cemented the disposition of a 326-unit complex still under construction in Quincy for $110 million to Archstone-Smith, one of the country’s top apartment real estate investment trusts.
Another transaction totaling 512 units in Boston also was unveiled last week, as Apartment Realty Advisors negotiated the $90 million sale of several buildings in the Hub’s Fenway and Allston neighborhoods. That agreement – first announced on Banker & Tradesman’s Web site, beta.bankerandtradesman.com, last Thursday – involved the sale of a portfolio assembled during the past quarter-century by Forest Properties of Newton, with BlackRock Realty of New York paying approximately $175,000 per unit for the package.
Forest Properties Chairman Jeffrey Libert was unavailable for comment to discuss the sale, but in a press release issued after the deal was completed, Libert said the agreement offered “exceptional returns” for his company and several partners, particularly given that some of the properties had been acquired in the early 1980s for as little as $10,000 per unit. Forest Properties will continue to manage the units, Libert also announced.
The bulk of the portfolio is located in the Fenway, including the well-known Parkside Apartments at 91-95 Westland Ave. A converted historic hotel located near the Boston Museum of Fine Arts, the 151-unit Parkside accounted for $29.7 million of the purchase price shelled out by BlackRock Realty, a New York based investment group which last year merged with SSR Realty Advisors, once a major investor in Massachusetts residential properties. Other Fenway assets harvested by Forest Properties included 26, 64 and 175 Hemenway St. and 121 Park Drive, while 133 units in Allston were sold as well. Those apartments were in the Cambridge Place and Barrows Place apartments, both located near Union Square.
‘Strong Demand’
Broker Jonathan Close, whose ARA New England team handled the sale on behalf of Forest Properties, said the package offered a rare opportunity for an investor to purchase a substantial swath of apartments in the eternally tight Boston market. “The strong demand for downtown housing has clearly perked the interest for institutional investors,” said Close, who reported an impressive list of bidders vying for the portfolio.
ARA’s New England multifamily investment team has now brokered nearly $570 million of apartments in the region since 2003. The Forest Properties deal is the firm’s largest to date this year, said Close, although the group is still marketing a number of prominent properties as the final two months of the year approach. While much of the velocity for apartments has been generated by investors planning a condominium conversion strategy, such is not always the case. Not only is BlackRock expected to retain the bulk of the Forest Properties units as rentals, Archstone-Smith plans a similar tactic in Quincy, according to Griffin.
While condominium converters are driving the price of multifamily assets upward to record levels, Griffin said there is plenty of capital such as REITs more interested in establishing market share than turning a quick dollar. But the aggressive pricing will require such players to pay a premium to win a deal, Griffin concurred, with Archstone-Smith having to overcome a number of high-flying bidders to win the deal. Although Griffin would not provide details, sources said Archstone-Smith is paying about $110 million for the Village at Quarry Hills, or an eye-popping $340,000 per unit. Developed by the Finger Cos., the property is still under construction, with completion anticipated early next year.
By comparison, the Hamilton Co. scored a deal in buying 12 Stoneholm St. near Boston’s Symphony Hall. The Allston-based real estate firm paid $215,000 per unit for the asset, one which some maintain will be positioned for sale as condominiums. In addition to the prime location, 12 Stoneholm St. features amenities such as parking and a pool.
Griffin could not say what the prospects are for the latest multifamily property being put up for sale, the Longview at Georgetown. Located just off Interstate 95 near the New Hampshire border, Longview at Georgetown is a mix of one-, two- and three-bedroom units in five buildings, with rents starting at $1,185 per month for a one-bedroom. The complex also has an on-site pool, fitness center and community clubhouse. An asking price has not been established for the property, and Griffin could not say whether a deal would be completed by year’s end. Longview at Georgetown is managed by the Dolben Co. of Burlington.
