MD Multifamily Buyer Lands $34M Financing

By Gail Kalinoski

The Estates at Pikesville

The new owner of a 208-unit, low-rise multifamily property in Pikesville, Md., received a $33.8 million first mortgage bridge loan from Hunt Real Estate Capital for the acquisition and capital improvement plan.

Hunt did not release the buyer’s identity or the name and address of the property, but according to Yardi Matrix it is The Estates at Pikesville, owned by Jeffrey Cohen’s Metropolitan Properties of America. Harbor Group International sold the asset for $34.5 million or $165,865 per unit.

Located at 1601 Hutzler Lane, about 15 miles northwest of downtown Baltimore, the apartment community is 95 percent occupied. The 8.76-acre site contains seven buildings with a mix of 36 one-bedroom units, 69 one-bedroom apartments with fireplaces, 44 one-bedroom units with dens and 59 two-bedroom units. Amenities include a swimming pool, a clubhouse/recreation building, a fitness room and storage.

“The borrower will implement on a capital improvement plan just after closing,” RJ Guttroff, managing director at Hunt Real Estate Capital, said in a prepared statement. “Planned renovations include interior upgrades that will be completed as units turn over during a 30-month timeframe and exterior renovations are expected to commence within 90 days of closing.”

Interior upgrades will include new quartz/granite countertops, stainless steel appliances, cabinet replacement, doors and flooring. The parking lot will be repaved. Other exterior improvements will include painting and upgrades to the entry gate, lighting and clubhouse.

“The borrower is an experienced owner operator that has managed more than 10 million square feet of residential and commercial real estate in eight states including Massachusetts, Ohio, Pennsylvania, Michigan, Florida, Texas, North Carolina and Illinois,” Guttroff said. “He currently owns and manages over 2,600 multifamily units as well as more than 116,000 square feet in office space and has executed similar capital improvement plans within his portfolio. We were pleased to partner with him and provide this new bridge loan.”

Last week, Hunt Real Estate Capital provided Vukota Capital Management with a $24.7 million bridge loan to acquire and make renovations at Legacy Crossing, a 408-unit community in Omaha, Neb. The new owner of the garden-style community plans to use $4 million of the floating rate mortgage’s proceeds on upgrades at the property.

Baltimore Market Moves

In June, another suburban Baltimore multifamily property changed hands with Blue Ocean selling Ivy Crossing at Catonsville, a 93-unit multifamily property in Catonsville, Md., for $8 million.

The Marcus & Millichap Multifamily Research 2018 Investment Forecast for the Baltimore Metro Area noted that transaction velocity had increased. The report said the sales were “driven by active investment from a combination of local and out-of-state buyers” and underscored the market’s strength.

Yardi Matrix said demand for multifamily properties was slowly picking up in early 2018 due to the region’s job growth, rising incomes and population gains. In its Multifamily Report Spring 2018 report, Yardi Matrix stated a significant number of buyers were targeting Class C assets, mostly in the suburbs, which offer acquisition yields of up to 6.5 percent for stabilized properties and 8.0 percent for value-add properties. Morgan Properties’ $95 million acquisition of the 806-unit Carriage Hill Village in Randallstown, Md., was the metro’s largest multifamily transaction in the year ending in March, according to Yardi Matrix. Much of the new multifamily development in the Baltimore metro area is occurring in the downtown, the Inner Harbor and Fells Point submarkets, including a mix of high-end conversions and ground-up projects targeting young singles and couples as well as empty nesters.

Image courtesy of Yardi Matrix