WashREIT Wraps Up $461M Portfolio Buy
- Jul 01, 2019
Washington Real Estate Investment Trust (WashREIT) has closed on the second tranche of a $461 million portfolio purchase by snapping up two garden-style communities in Montgomery County, Md., for $82 million. The suburban properties totaling 428 units are located in Germantown and Gaithersburg, northwest of Washington, D.C.
The NYSE-listed REIT closed the initial tranche of the 2,113-unit, value-add portfolio deal in April, paying $379.1 million to acquire five multifamily assets in Northern Virginia. The purchase of the two remaining assets rounds out the transaction, which is aimed at capitalizing on strong demand for value-oriented rental housing in the region.
The newly acquired properties include The Point at Germantown, a 218-unit community at 2 Observation Drive, Germantown; and The Point at Watkins Mill, a 210-unit asset at 180 Watkins Station Road, Gaithersburg. The properties were built in 1990 and 1972, respectively, with occupancy rates of 95.7 percent and 98.2 percent, according to Yardi Matrix data.
Although the seller of the assets was not disclosed, the data reveals the previous owner as multifamily investor and operator Pantzer Properties.
Betting on millennial renters
The transaction boosts WashREIT’s total multifamily portfolio in the D.C. metropolitan area to 6,381 units, in addition to the more than 5.8 million square feet of commercial space owned by the trust. The overall seven-asset portfolio deal expands WashREIT’s multifamily unit count by 50 percent. The company previously said that it would fund both tranches of the acquisition through the sale of select office and retail assets.
WashREIT is betting on rising demand for Class B suburban rental properties from aging Millennials. The Germantown/Montgomery Village submarket pulled in $554 million of multifamily investment capital during the 12 months ending in February, the greatest amount of any D.C.-area submarket, according to the latest Yardi Matrix report.