Harbor Group Buys Baltimore’s Belvedere Towers for $26.1M
- Oct 13, 2011
Baltimore, Md.—Harbor Group International LLC continues to enhance its presence in Baltimore with the acquisition of Belvedere Towers Apartments. The real estate investment and management firm picked up the 234-unit high-rise for $26.1 million. The asset last traded in 2007 for $23 million.
Belvedere occupies 5.5 acres just a few blocks from I-83 in an area of well-established and affluent neighborhoods. The property features 12,200 square feet of ground-level retail space and another impressive attribute—the largest apartment units in the submarket. Residences average 1,169 square feet.
HGI plans to make improvements to Belvedere, which first opened its doors in 1965, through an investment of approximately $2.6 million. “The seller had started a significant interior renovation, but for strategic reasons they needed to exit the asset before they had finished,” T. Richard Litton, Jr., president of HGI, tells MHN. “So we will complete the interior renovation process and then we think that the property will be very well positioned to capitalize on the improving market from a rent and occupancy perspective.”
Indeed, the Baltimore apartment market is on solid ground. Although the current rate of annual effective rent growth has dropped from its peak in February, it is still at a respectable 4.2 percent, according to numbers released by apartment market data provider Axiometrics in August. And there’s more good news. Despite the slowdown in rent growth, the occupancy level continues on the upswing as it has since January. The current occupancy rate is 95.7 percent.
It’s all about jobs. “We still feel, as most people do, that there’s significant money through the government and the different federal agencies that will spur on the Baltimore economy,” Litton explains. “There have been tremendous things going on in the Washington, D.C./Baltimore Corridor, so overall we just feel like the federal government impact will continue to be very positive for the whole region. And Belvedere is located near very high-end retail, has tremendous access to the interstate and the main road systems in Baltimore. I think it will continue to be an attractive place for tenants to live relative to their job locations.”
Belvedere marks HGI’s second apartment transaction in Charm City in three months. In July, the company expanded holdings in the market by 1,984 units through the acquisition of a six-property portfolio for $190 million. It was a good deal. “Sometimes a lot of transactions that are inside the Beltway get priced up and bid up and are very tough from a pricing perspective, but we think we’ve been able to find opportunities in the Baltimore submarket that are very compelling from a price perspective,” he says.
But HGI has its eye on areas beyond Baltimore. “If there’s one region where we don’t have a lot of assets and would like to buy more it is Orlando, Tampa and South Florida. That is where we plan on spending a lot of time.”