News
(MULTI)FAMILY MATTERS
July 22, 2011
| Today, Harbor Group International announced it acquired a six-property, 1,984-unit multifamily portfolio in Baltimore for $190M. Kinda gets us excited for our first-ever B'more Multifamily Summit next week. (Still to to sign up.) |
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| Harbor Group will invest an additional $7.7M for renovations at the properties, which include Diamond Ridge, Granite Run, Rolling Wind,Stratton Meadows (above), The Glens at Rolling Road, and Crosswinds at Rolling Road. The buy brings Harbor Group's central Maryland holdings to 3,300 units and follows its May acquisition of a 2,500-unit portfolio in southeastern Virginia. |
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| No wonder CBRE multifamily guru Bill Roohan (above, flanked by colleagues Mike Muldowney and Michael Rudolph) told us this morning that Baltimore's multifamily market is ?very healthy.? Rents are up by 3% to 6%, and vacancy is hovering around 5%. ?Baltimore's apartment market benefits enormously from our universities and hospitals,? says Bill. (The ?eds and meds effect,? says Mike.) He tells us the confluence of factors like Gen Y-ers moving out of mom's basement, BRAC (which he says will result in the area's biggest economic boom since WWII), and a dearth of new construction means demand will stay strong through 2013. And investors like Harbor Group are responding: ?Different investors want different things, but Baltimore consistently ranks in the nation's top 10 in terms of occupancy, rent growth, and lowest concessions.? |
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| Harkins Builders? Steve Rubin (with colleagues Larry Kraemer and Gary Garofalo) tells us straightforward projects get financed first. ?We're seeing developers rethink deals involving complex, high-density urban sites,? he says, ?especially those requiring structured parking. Particularly in the B'more suburbs, rents aren't high enough to justify construction costs.? Relatively simple mid-rise and garden-style apartments, on the other hand, are an easier sell. For example, he tells us Harkins is working on the $28.5M revitalization of Monarch Mills in Columbia, a 10-building, 269-unit garden apartment project that?ll deliver late this summer. ?This project is a little complicated because it involved demolishing existing units,? says Steve. ?But the development partnership, a JV between Howard County and Shelter, were a good team capable of working through the issues. Having a good sponsor is probably more important than having a good project.? |
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| And there's always room for adaptive reuse projects. Early this week, the Mullan Contracting Co announced it completed converting Baltimore City's former Calvert School into 13 apartments. (We're told both nerds and jocks are allowed to live there.) The deal required ?significant value engineering,? says Mullan prez Joe Rode, especially when you consider the challenges of converting old classrooms with eight-foot windows into 600 SF units (above). The project (named The Chase Apartments) is almost fully leased up, and developer Walid Hajj says he's already looking for his next challenge. ?We don't do ground-up construction,? he says. ?Restoration projects are so much more fun.? |
