550-Unit Suburban Boston Apartment Complex Sold for $188M
- Aug 17, 2012
Oak Grove Village, a luxury apartment complex straddling the suburban Boston cities of Melrose and Malden, Mass., has come under new ownership. With the assistance of CB Richard Ellis – N.E. Partners L.P., Pembroke Real Estate has sold the 550-residence property to an unidentified buyer.
Neither CBRE-NE nor Pembroke have disclosed the price tag attached to the Oak Grove sale; however, the Boston Business Journal has reported that the asset fetched $188 million.
The transaction comes three years after Pembroke, a division of Fidelity Investments, completed the two-phase development of Oak Grove. The high-end property occupies 16 acres and features approximately 15,000 square feet of retail offerings, as well as a coveted location just across from a Metro station.
Investors are keen on the metropolitan Boston apartment market, and for good reason. Demand outweighs supply-side pressures. The vacancy rate plummeted to a 10-year low of 3.6 percent in the second quarter, according to a report by Marcus & Millichap Real Estate Investment Services. With rising employment and the continuation of strict lending standards for homebuyers, there appears to be no end in sight to the tightening of the market. Marcus & Millichap anticipates that by year’s end, rents will reach uncharted territory.
It’s the perfect storm for investors, who are becoming increasingly interested in the outlying areas of Boston. “Competition will remain fierce for top-tier properties in the core, encouraging yield-seeking buyers to venture to the suburbs, where cap rates average above 6 percent,” according to the report. The Oak Grove deal was just one case in point this week. Archstone just announced that it has completed the purchase of the 285-unit Station 250 luxury apartment community in Dedham, reportedly at a cost of $94.2 million.