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May. 20, 2013

Lubert-Adler Buys Huntington Point Apartments for $78M, Amasses $2B M-F Portfolio

By Adrian Maties, Associate Editor

Philadelphia-based real estate investment company Lubert-Adler recently partnered with The Laramar Group to purchase the Huntington Point apartment complex in Alexandria, Va., for $78 million.

Located on the Potomac River, just south of Old Town Alexandria, the complex had been owned by the Virginia Department of Transportation since 2002. It sold the 530-unit apartment complex to the partnership for about $147,000 per unit. Hardly the first building the two companies acquired together, in April they bought the 376-unit Woodvale Apartments for $53.2 million.

In a release, Lubert-Adler said that, despite Huntington Point’s superior location, unit interiors and amenities have been untouched for years and rents are 30 to 40 percent below market rate. The company believes it can transform the property into a Class A apartment community.

The new owners plan to invest about $14 million in capital improvements over the next three years, with upgrades that will include new lobbies, corridors, rooftop entertainment areas, building systems, mechanical repairs, façade improvements and riverside pool amenities. Individual apartments will also be renovated, with new kitchens, baths, windows, flooring and other improvements.

Lubert-Adler launched its Fund VI in January 2010. To date, it has invested $2 billion invested on behalf of domestic institutional investors, having acquired, among other things,  almost 70 multifamily properties totaling more than 20,000 units. “In 2010, we made a strategic decision based on the belief that multifamily rental apartments provide one of the best opportunities to create risk-adjusted superior returns, because a substantial portion of the overall return is in the form of current yield,” Dean Adler, co-founder & CEO of Lubert-Adler Partners L.P., said in a statement for the press.

The acquisition of Huntington Point fits perfectly into the company’s strategy. “In order to execute that strategy, we sought out one-off middle-market acquisitions through local entrepreneurs, focusing on transactions that are too large for local operators but smaller than those that would interest the very large funds,” Adler added. “Our goal was to buy assets opportunistically, preferably from sellers who are not in the everyday business of improving real estate, and then work with our local partners to increase current yield by renovating and repositioning the assets. Now that we have achieved our initial goal, we plan to continue this value-add program into the future.”

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Photo credits: LHB Communications

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