Apartment Community On D.C.-Maryland Border Sells For $48M
Investor demand for workforce housing remains strong, with the latest deal closing on the D.C.-Maryland border.
Melnick Real Estate Advisors founder and President Scott Melnick tells Bisnow his firm brokered the sale last week of the South Pointe property at 2603 Southern Ave. in Temple Hills, Maryland, to Signature Properties for $48.3M.
The Kohn family, a private investor based in Montreal, sold the 390-unit property. South Pointe, built in the late 1940s, sits about 1 mile from the Southern Avenue and Naylor Road Metro stations.
The property sold for a 4.3% capitalization rate based on last year's net operating income, according to Melnick, who said this shows how hot the market is for buying workforce housing properties.
"A 4.3% cap [rate] is more aggressive than newer deals, and this property was built around 1950," Melnick said. "With all the capital raised for workforce housing, that's why these deals are so highly sought after."
Melnick said the deal also showed the continued strong investor interest in Prince George's County, especially for properties along the Metro's Green Line. He said this property's location on the Maryland side of the D.C. border was seen as another benefit for investors because they wouldn't have to navigate D.C.'s Tenant Opportunity to Purchase Act process.
"For investors who want to buy in that area, the properties across the street are in D.C., so you'd have to get involved with TOPA," Melnick said. "Investors like that area along the Green Line and all of Prince George's County."
The deal is the latest in a series of multifamily acquisitions Signature Properties has made in the region. The investor last year bought apartment properties in Silver Spring, Prince George's County and Baltimore, all deals in which Melnick's firm was involved. Melnick previously worked at Berkadia, JLL and Transwestern before launching his own firm in 2018.