Donaldson Group-Angelo, Gordon JV Buys M-F Complex in DC’s Maryland Burbs for $110M

The Donaldson Group and Angelo, Gordon & Co. have acquired Cider Mill Apartments, an 864-unit garden-style apartment community in Montgomery Village, Md.

MDThe Donaldson Group, of Rockville, Md., and Angelo, Gordon & Co., of New York, Donaldson’s equity partner, have acquired Cider Mill Apartments, an 864-unit garden-style apartment community in Montgomery Village, Md., the purchasers announced Friday.

The acquisition price was about $110 million, on top of which the partnership reportedly plans to invest an additional $15 million to renovate the property.

Cider Mill comprises 72 garden apartment buildings constructed between 1971 and 1973 and situated on about 42 acres in Montgomery County. Its one-, two- and three-bedroom apartments range from 690 to 1,140 square feet. Amenities include an Olympic-size swimming pool, fitness center, resident services center, playgrounds, central laundry facilities, picnic and barbecue areas, and a car wash station.

The community is a mile from I-270 and 1.5 miles from the Gaithersburg MARC commuter rail station. It’s across the street from Lakeforest Mall, a 1.1-million-square-foot shopping center that is anchored by JC Penney, Lord & Taylor, Macy’s and Sears and is currently undergoing a renovation.

“The acquisition of Cider Mill Apartments presents us with an outstanding opportunity to reposition a well-located apartment community in a strong rental market,” Donaldson Group President Carlton Einsel said in a release.

The purchasers’ renovations will include replacing the original central heating and cooling plant with individual high-efficiency electric heat pumps for each apartment. Individual apartments will be renovated with all-new kitchens (cabinetry, countertops, flooring, lighting and appliances), carpeting, doors, fixtures, bathrooms and in-unit washer-dryers.

The new ownership also plans to upgrade the building facades, common areas and courtyards, landscaping and fencing, leasing center, fitness center, and pool house.

The seller, Home Properties, was represented by Bill Roohan and Brian Margerum of CBRE’s Baltimore-based investment sales group.

Matthew Williams and Maury Zanoff of CBRE Capital Markets assisted the buyers in obtaining acquisition financing from HSBC Bank.

Continued concerns about possible federal budget cuts, in combination with a 3.4 percent increase in the apartment stock this year, could push vacancies to a level not seen since 2009 and slow rent growth, according to a recent report from Marcus & Millichap.

On the other hand, the report suggested the potential for condo conversions to take the edge off an oversupply that could grow by 6,000 apartment units in 2014.