Continental Sheds 4 in Baltimore
- May 12, 2017
Transwestern has represented Continental Realty Corp. in the disposition of four apartment communities in Baltimore. The four properties, totaling 627 units, were sold to two buyers. Schweb Partners purchased Hunting Hills and Mallow Hill, which total 230 units. Kindred Property Group purchased Oaklee Village and Leeds Avenue, totaling 397 units.
“The biggest challenge was it was a multiple-buyer transaction, with four assets divided among two buyers,” Dean Sigmon, Bethesda, Md.-based executive vice president and co-director with partner Robin Williams in Transwestern’s Mid-Atlantic Multifamily Group, told MHN.
“We’re very hands-on in the due diligence process. We had a lot of out-of-town interest from would-be buyers, and Transwestern has been extremely successful in bringing in new investors to make their very first multifamily investment in Baltimore.”
There is good reason for that attraction to Baltimore among buyers from outside the metro, he added. “We’ve seen significant improvements in the quality and quantity of jobs in Baltimore, whether in health care or professional services,” he said, noting Baltimore has witnessed robust employment growth in higher-earning wage sectors.
For instance, professional and business services added 10,900 new jobs in 2016, while education and health services expanded by 8,200 new positions. This job growth is generating greater opportunities for value-add investors to reap significant yields on multifamily property acquisitions.
“All of these properties provided a compelling value-add investment opportunity,” said Justin Shay, who teamed with Sigmon and Williams in guiding the transaction to completion. “Continental Realty had already achieved rental premiums by renovating interiors on some of the units. Additionally, the properties will continue to benefit from proximity to major employment centers like the University of Maryland-Baltimore County and Woodlawn Federal Center in neighboring Baltimore County.”
Hunting Hills, at 4601 Pen Lucy Road, and Mallow Hill, at 220 Stonecroft Road, operate as a single apartment community, which enhances managerial efficiency. Oaklee Village, at 1001 Arion Park Road, and Leeds Avenue, located at 1005 Leeds Avenue, also operate as a single apartment property.
The properties’ proximity to Interstates 695, 95 and 70, and Routes 1 and 40 is a prime selling point, giving residents convenient access to downtown Baltimore and a great many Baltimore County employers.
Those employers include St. Agnes Hospital, the University of Maryland–Baltimore County, the U.S. Social Security Administration and BWI Airport.
“We have a good understanding of the buyer pool for value-add apartment product in Baltimore,” Sigmon said. “Our group has done the lion’s share of older, 1960s- and 1970s-vintage transactions in Baltimore over the last few years. That was the reason we were chosen, because we understand the buyer pool and have been one of the few successful brokers to bring in new investors breaking in to the Baltimore market.”