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Cortland Dropping Over $1B On 4 Multifamily Properties In Arlington

The 23-story apartment building at 1788 North Pierce St. in Arlington that Penzance delivered last year and Cortland has now acquired.

Cortland, one of the largest apartment owners in the U.S., is making a huge entrance to Greater Washington, acquiring four Arlington multifamily properties in an expected $1B investment. 

The Atlanta-based investment firm acquired a newly developed 23-story, 331-unit apartment building in Rosslyn and a 534-unit building in Pentagon City, Cortland announced Wednesday. A spokesperson said those deals have closed, and the company expects to finalize its acquisition of two other Arlington buildings soon.  

“Northern Virginia is a highly coveted location that is already seeing a rebound in growth as residents move back to the urban core,” Cortland Chief Investment Officer Mike Altman said in a statement. “This is just the start of Cortland’s investment in the region, driven by our commitment to deliver an unrivaled resident-centric, hospitality-driven experience that is changing the standard of apartment living.”  

The firm didn't disclose the other two properties it acquired, but it said the four assets will total more than 1,500 units and cost more than $1B. The prices for the two closed deals weren't disclosed, and they have yet to appear in property records.

The Rosslyn building at 1788 North Pierce St. was previously branded as the Aubrey and will be rebranded to Cortland Rosslyn, the buyer said. Developer Penzance celebrated the ribbon-cutting in October on the project, part of its three-building, 890-unit Highlands development.

Penzance partnered with Boston-based The Baupost Group LLC on the development. Newmark's Christine Espenshade and Robert Garrish represented the sellers in the deal.

"After pouring our hearts into The Highlands for the last 11 years, it’s incredibly rewarding to see the project succeed, ” Penzance Chief Development and Construction Officer John Kusturiss said in a release. “This sale is a true testament of the robustness of the Northern Virginia market, and we’re confident that with their impressive portfolio, Cortland will be excellent stewards of the property.”  

Cortland acquired the second building, the Aura Pentagon City at 1221 South Eads St., from Polinger Co. and will rebrand it as Cortland Pentagon City, the buyer said.

Built in 2001, the Pentagon City property received a huge boost in value when Amazon selected a site one block away for its HQ2 development in late 2018. Paradigm Cos. sold the building in May 2019 to Polinger for $228M, more than double the $109M price tag Paradigm paid for it in 2009. 

The new owner said in a release it plans to "modernize" the Pentagon City apartment building, which it thinks will benefit from the area's growing tech sector.

Cortland, founded in 2005, owns or manages more than 85,000 units across 250 apartment communities. Its portfolio includes assets in Alabama, Arizona, Colorado, Florida, Georgia, Idaho, North Carolina, Ohio, Tennessee and Texas, according to its website, but it didn't previously own any properties in the D.C. area. 

Cortland described the acquisitions as marking its re-entry to the D.C. market but didn't detail its prior history in the area. It appears to have built a 600-unit community in Ashburn, Virginia, in 2016, which it sold in December 2020 for $190M, property records show. 

UPDATE, MAY 18, 10:30 A.M. ET: This story has been updated with additional details and comments from Penzance on its sale of the Rosslyn building.