Time To Sell Multifamily?

December 20, 2012 | 7:00 am ET Staff Reporter

With cap rates so compressed, and investment dollars hungry for multifamily, legacy owners may want to harvest their units. We spoke to two companies that are doing just that. (They made time for us between trying to get for-sale signs to stay in the cold, winter ground.)

Pathfinder Partners’ Lorne Polger spent 20 minutes wrangling this deep sea catch on his 50th birthday tripto Cabo. He doesn't believe cap rates will go any lower and says while Pathfinder hasn’t sold anything in Denver (it actually owned more for-sale condos here than apartments), it’s been divesting in other markets. For example: a 120-unit apartment complex in Mesa, Ariz. it picked up 18 months ago as an REO; Leucadia Shores in San Diego (its hometown), where it sold a 14-unit townhouse project for $3.5M; Hawthorne 44, a newly-built 27-unit complex in Portland, Ore. initially purchased as a default note; and a 33-unit loft project in LA also acquired through a default note. “I think there are some other things that we will dispose of in 2013,” he says.

That’s not to say he’s down on Denver. “We love Denver, and we like the stabilityright now,” Lorne says. And putting Pathfinders’ money where his mouth is, the firm bought 9195 and 9197 W 6th Ave in Lakewood—two fully-leased buildings spanning 49k SF in the Garrison Business Park from a CMBS special servicer in a $4.3M all-cash deal. That’s the kind of deal Pathfinder is seeking going forward: “We bought it basically at over a 10 cap with in-place rent,” he says. “It’s an opportunistic buy for a yield.”