StoneBridge Acquires Beech’s Farm in MD

Washington, D.C.—StoneBridge Investments, a Washington, D.C.-based real estate investment company focused on the multifamily market, has purchased the 135-unit Beech’s Farm multifamily community in Columbia, Md. The acquisition price was $25.5 million. The seller was represented by CBRE’s Mid-Atlantic multifamily team.

A 31-year-old property consisting of seven two- and three-story townhome-like buildings, Beech’s Farm is well situated to provide residents with a raft of conveniences. The property is across the street from King’s Contrivance Village Center, a retail mecca with a supermarket and pharmacy as well as an array of restaurants and service businesses. The Mall in Columbia, a 1.4 million-square-foot shopping mall, is located just minutes away and offers department stores, a movie theater and a supermarket.

Columbia offers walking trails, community centers, a prominent entertainment venue and a 27-acre lake, as well as excellent access to the nation’s capital and Baltimore.

“We liked the location within Columbia, Money Magazine’s ‘Number One Best Place to Live 2016,’ and proximity to major public and private sector employers, particularly in high-growth fields such as cybersecurity,” StoneBridge Investments’ Director William Bateman told MHN, adding household income averages $145,000 within a mile of the property. “Specifically, the location within short walking distance to a neighborhood retail center differentiated it from the direct comps in the neighborhood.”

The acquisition complements StoneBridge Investment’s recent purchase of Seven Oaks, a 278-unit community in Odenton, Md. undergoing repositioning and renovation.  “For our European investors, this type of acquisition is part of an overall diversification beyond the uncertainty of the Eurozone, as well as increased exposure to the dollar,” said Kees Bruggen, StoneBridge Investments’ Managing Director.

StoneBridge Investments’ affiliate ZRS Management will manage both Beech’s Farm and Seven Oaks. ZRS now manages almost 2,000 units in the Washington, D.C. metropolitan area and more than 32,000 units nationwide.

When StoneBridge Investments was considering acquiring Beech’s Farm, several upsides stood out, Bateman recalled.

For one thing, the property enjoyed a strong history of occupancy and steady rent increases. In addition, its original finishes provided upside that could be realized through unit upgrades at turnover over time.

The property’s disadvantages included a dearth of traditional amenities associated with garden-style apartment communities, such as a swimming pool.

However, Beech’s Farm offered StoneBridge Investments the opportunity to add a fitness center and thereby improve marketability to future residents. In addition, Bateman said, all residents have access to Columbia’s ample supply of pools, fitness centers and other community anchors, simply by virtue of residing at the property.

“Beech’s Farm provides an excellent opportunity for our European investors,” he concluded. “It is a well-located, cash-flowing property with a long history of stable occupancy in a highly desirable location. With upside through value-add unit upgrades over time, this property provides a very attractive risk-adjusted return profile.”