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Garden apartment communities in the D.C. suburbs have been trading at a rapid pace this year, but one Falls Church apartment owner decided to refinance and renovate its property rather than sell.
Erkiletian Cos., a family-owned real estate firm based in Arlington, secured a $63.2M loan from Freddie Mac for the PeachTree of McLean apartments. Berkadia Director Jonathan Pratt secured the loan on behalf of Erkiletian in a deal that closed Friday.
The 10-year, fixed rate loan with an interest rate below 4% was secured through Freddie Mac's Multifamily Green Advantage loan program. As part of the deal, Erkiletian committed to improving the property's water and energy efficiency by 30%.
Erkiletian developed the 340-unit PeachTree of McLean apartments in 1979, and it is now its longest-held property. The garden-style community at 2042 Peach Orchard Drive in Falls Church features a swimming pool, a game room, a fitness center and a grilling area. Its units range from one to three bedrooms, and the property is over 95% occupied.
The community sits near the interchange of the Leesburg Pike and Interstate 66, less than a half-mile from two shopping centers anchored by Trader Joe's and Whole Foods. The owner plans to use the money to renovate the property and to fund additional development ventures.
Investors have made a series of acquisitions of Class-B apartment portfolios in the D.C. suburbs so far this year. Pratt said Erkiletian could have sold the property and realized a large gain, but it decided instead to continue to hold and improve the asset.
"We're happy they're holding onto it and deciding to renovate it and add the value themselves rather than sell it," Pratt said. "This is an in-demand commodity and they are going to be bringing up the quality of the asset."
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