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A joint venture of Multifamily Acquisition Advisors and Serone Asset Management has bought a Back Bay apartment building for $24M, closing on the purchase despite the ecomomic uncertainty caused by the coronavirus.
"People are walking away from deals, and we did consider it, since looking at your options is always a prudent thing to do," MAA Managing Principal Christopher Thomson said, noting that the deal had been put in place before the outbreak intensified. "But we decided that the fundamentals were too strong to let the deal go, even in the current environment.
"If you shelter in place, you need a place to do that. If you work from home, you need a home," Thomson said. "That's for now. The long-term fundamentals of the Boston multifamily market aren't going to change because of this event."
The JV bought the 55-unit apartment property, 16 Westland, for about $436K/unit from seller Coppola Management Real Estate.
"The Copolla family were phenomenal custodians of 16 Westland, prioritizing their tenants’ experience for more than 40 years. MAA has an excellent track record of managing well-located buildings, complimented by convenience to retail and proximity to public transportation," said Boston Realty Advisors CEO Jason Weissman, who led the team brokering the deal. "I’m confident that MAA will preserve the character of the building, while adding value to its legacy.”
Boston in is a strong market, especially for housing students, Thomson said. Students occupy most of the property, which is currently 100% leased. Though the economic dislocation caused by the pandemic is impossible to gauge now, the Boston apartment market started 2020 in a position of strength.
"Among the gateway markets, Boston is the star performer," CBRE noted in its 2020 Multifamily Market Outlook. Multifamily vacancy in the market averaged 4.3% in 2019, below the long-term average of 5.1%.
Before the deal, 10 units at 16 Westland had been updated. MAA plans to invest $1.4M to complete upgrades on all units, including work on kitchens and bathrooms.
In accordance with the necessities of the times, the participants in the 16 Westland transaction practiced social distancing and closed via eFiling, according to Boston Realty Advisors Managing Principal Wil Catlin.
There have been other investment sales done recently despite the outbreak, Catlin said.
"Those have generally been 1031 tax-exchange buyers, deals that need to happen on schedule," he said.
UPDATE, APRIL 7 5:20 P.M. ET: This story has been updated to include comments from Weissman.
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