A joint venture between Dantes Community Partners and Jonathan Rose Cos. have created 372 new units of affordable and rent restricted housing in suburban Maryland as part of their acquisition of a 930-unit workforce community from Dragone Realty Investments and GMF Capital for $164 million.
The Avanti Apartments at 6501 Hil-Mar Drive is a garden-style community built in 1965 in District Heights, Md., located about 20 minutes from downtown Washington, D.C. It was 96.5 percent occupied at the time of the sale.
CBRE’s Washington, D.C. Multifamily Investment Properties Team arranged the sale. The project will be financed with Fannie Mae debt arranged by Walker & Dunlop. DCP’s property management affiliate, Faria Management, will manage the asset.
Upon acquisition, the joint venture recorded a new long-term affordability covenant with Prince George’s County to ensure 372 units of income and rent-restricted housing will be created. Restrictions will require 20 percent of units will be at 50 percent of the area median income (AMI) and 20 percent of units at 80 percent AMI. The JV will also offer year-round resident services and programming at the property and will also make capital improvements including upgrading amenities, enhancing curb appeal and driving down utility costs and consumption through targeted green improvements.
Sharif T. Mitchell, operating principal of DCP, an investment fund manager focused on creating and preserving affordable and workforce housing, said in a prepared statement the acquisition aligned with its mission to address the affordability crisis with units that are sustainable for residents and generate reliable income for investors. He said the firm is actively pursuing Section 8, expiring Low Income Housing Tax Credit (LIHTC) and naturally affordable properties across the country.
For Jonathan Rose Cos., one of the top developers and investors in green, affordable and mixed-income community development and preservation, the joint venture provided an opportunity to partner with a local, mission-aligned investment firm to create and preserve hundreds of newly restricted units of affordable housing, Nathan Taft, senior managing director of acquisitions at Jonathan Rose Cos., said in prepared remarks.
Dragone Realty Investments had owned the property since July 2012, when it acquired the asset for $58 million from Freddie Mac’s REO portfolio, according to Yardi Matrix data. A $64.5 million loan held by Freddie Mac had been foreclosed on in December 2011, Yardi Matrix reported. An earlier owner, Miles Properties, had purchased the community in October 2005 for $53.6 million from Henry F. Goldberg. In December 2017, the property was recapitalized with a sale for $131 million. Dragone retained its ownership stake and GMF Capital replaced PCCP LLC.
The property has one-, two- and three-bedroom units ranging in size from 701 square feet to 1,328 square feet with an average of 991 square feet.
Amenities include two resort-style swimming pools, a new two-story clubhouse, newly renovated pool house, fitness center, business center, dog park, basketball court, playground, jogging/walking trails and barbecue and picnic area. The property has about 1,000 parking spaces.
The Avanti Apartments is located 5 miles from the Branch Avenue Metro Station. Joint Base Andrews and Suitland Federal Center are 3 miles from the property and the U.S. Citizenship and Immigration Services headquarters is located at One Town Center, 5 miles away from the community. Two retail centers totaling more than 84,000 square feet are scheduled to open before the end of the year.