Washington, D.C.–A residential developer and a marketing firm specializing in condos and townhouses have joined forces to make money from a lingering headache created by the contraction of the for-sale multifamily market during the recession: fractured condominiums. The concept isn’t new, but the partners Fairfield Residential Co. L.L.C. and McWilliams-Ballard Inc. are betting that now is the time for their venture, which they’re calling the Property Portfolio, to pick up the pieces.
A down-and-dirty definition of a fractured condo project is simply one in which some, or a few, of the units were sold by the initial developer, but most languished unsold. The unsold units are thus rented or subject to a hybrid sales and leasing program. The Property Portfolio partners say that they will have the distinct advantage of a unified and coordinated property management, leasing and condominium unit sales effort to bring to bear on the problem of fractured condominium buildings.
“We are a single provider who’s able to offer total property asset management services, be it sales, leasing or management or a combination of any of the above,” Chris Masters, director of marketing at McWilliams-Ballard, tells MHN. “A lot of these properties’ owners are having to work with multiple parties to effectively operate the property,” which can be mind-numbingly complicated.
According to the partners, the new venture will seek out the “significant audience” of building owners and investors who are faced with unsold condominium inventory or who have purchased bulk units in a condominium building, offering them a platform for selling their inventory. “In terms of who is willing to invest in these projects, what we’ve seen is there’s a high interest among boutique investment firms, firms that are more easily able to quickly deploy and purchase these assets,” says Masters.
“Recently, however, we’ve seen a shift, where more of the larger, more prominent investment firms, such as Fairfield, really come to the forefront in seeking out these properties,” he continues. “There are a significant number of properties around the country that fall into this category and we feel there is a strong need for a firm such as ours to assist these investment firms and financial institutions to maximize their ROI.”
The two companies have worked together before. Fairfield has about 48,000 apartment units under management, ranking as the 12th-largest apartment manager in the United States by the National Multi Housing Council. It is active in more than 40 markets in 25 states. Since its inception, McWilliams-Ballard has sold more than 21,000 residential units representing over $8.1 billion dollars.