Transwestern Closes 2 Maryland Sales Worth $96M

Gatewater Landing. Image courtesy of Transwestern

Citing strong demand for value-add apartment properties, Transwestern Commercial Services’ Mid-Atlantic Multifamily Group sold two Maryland multifamily communities totaling $95.8 million. 

Transwestern Executive Vice Presidents Dean Sigmon and Robin Williams, Vice President Justin Shay and Analyst Michael D’Amelio represented the sellers in the transactions.

The two sales Transwestern closed are suburban Maryland properties that sold for nearly $100 million, or just under $50 million each.

Pantzer Properties sold The Point at Hampton Hollow, a 240-unit, garden-style community at 3408 Hampton Hollow Drive in Silver Spring, Md., to DF Ventures, a business unit of Drucker + Falk, for $49.5 million, or $206,250 per unit. Built in 1987, the Class B+, value-add property has 95 percent occupancy. Rents for the one- and two-bedroom units range from $1,291 to $2,040 with an average of $1,549, according to Yardi Matrix data. Located on 14.36 acres, the property has a fitness center, swimming pool and spa and more than 250 parking spaces. Unit features include vaulted ceilings, fireplaces and washer/dryers in all units.

The property last changed hands in September 2017, when Pantzer Properties bought the asset from LivCor for $39.6 million, or $165,000 per unit. Blackstone’s LivCor unit had acquired the community from Praedium Group in February 2015 in $1.7 billion portfolio sale that included 37 properties across the United States, according to Yardi Matrix.

L3C Capital Partners sold Gatewater Landing, a 263-unit garden-style community at 7357 Ridgewater Court in Glen Burnie, Md., to Gelfund Real Estate for $46.3 million, or $175,855 per unit. The Class B, value-add property was built in 1975 and has 97.3 percent occupancy. Located on 13.1 acres, the property has a volleyball court, playground, swimming pool and laundry facilities and 355 parking spaces. Rents for the one- and two-bedroom units range from $1,143 to $1,290, or an average of $1,230, according to Yardi Matrix data.

The property most recently changed hands in May 2015 when LC3 Capital Partners bought it from Lone Star Funds for $32 million, or $121,673 per unit, according to Yardi Matrix. Lone Star Funds had purchased the asset in September 2014 for $28.6 million, or $108,632 per unit, from DRA Advisors, as part of a 64-property portfolio transaction across nine states. An earlier sale in March 2008 was also a major portfolio transaction with DRA Advisors paying $1.7 billion to UDR for 86 multifamily properties, Yardi Matrix reported.

 Strong Demand, Low Supply

Sigmon said in a prepared statement they continue to see strong demand for value-add multifamily product throughout the Washington, D.C., and Baltimore regions. He noted that despite the impact COVID-19 has had on Class A rents and urban centers, they have seen continued cap rate compression for suburban Class B, value-add opportunities.

Williams noted new investors are entering the market and finding a lack of available product. He said the amount of available equity and increased focus on workforce housing and value-add assets have created a shortage of buying opportunities.

Suburban Maryland continues to outperform both Washington, D.C., and Northern Virginia, according to Delta Associates Third Quarter 2020 Class B Apartment Report. Rents remained stable for Class B, low-rise apartments in suburban Maryland in the 12 months ending September 2020, compared to a 7.0 rent decrease in Class A rents throughout the metro D.C. region, the report stated.

In May, the same Transwestern team represented Klein Holdings when it sold Villas at Langley, a 590-unit, value-add multifamily community in Hyattsville, Md., to Jair Lynch Real Estate for $87.5 million, or $148,305 per unit. In February, the team represented the seller of The River Front Apartments, a 144-unit waterfront community in Savage, Md., to Blue Ocean.