Grosvenor Buys M-F Asset in Suburban Washington for $108M
- Aug 04, 2014
In its first Washington, D.C.–area acquisition of a multi-family property, Grosvenor Americas has purchased Avalon Fair Oaks, a 491-unit apartment community in Fairfax, Va., for $108.2 million, the company announced late last week.
“This acquisition … fits well with our strategic objective to acquire value-add apartments in strong markets within the Washington, D.C., region, where we continue to seek additional opportunities,” Grosvenor senior vice president and general manager Scott Brody said in a statement.
The 27-year-old property, located on 13.5 acres at West Ox Road and Monument Drive, offers a pool and sundeck, clubhouse with free WiFi, picnic area, 24-hour fitness center, tennis court, racquetball court and structured parking.
Grosvenor plans to rebrand the community Wheelhouse of Fair Oaks and undertake significant renovations, including upgrades to interior unit finishes, the fitness club, leasing office and other public spaces. Renovations, leasing, property management and rebranding will be carried out by Thrive Communities Inc., which has repositioned several large Seattle-area apartment communities for Grosvenor.
David Nachison and Alan Davis of HFF represented the seller, whose identity could not immediately be confirmed by CPE.
Though this is Grosvenor’s first acquisition of an apartment community in the Washington metro area, the company has been active locally for some time. It partnered with The JBG Cos. in developing District, a boutique mixed-use development at 14th and S Streets, N.W., that it sold in late 2013 to J.P. Morgan.
Grosvenor owns Square 701, adjacent to Nationals Park in the Capitol Riverfront District, where it plans a mixed-use residential/retail development. Also in the pipeline is a mixed-use project in Silver Spring, Md., with 244 rental apartments and 18,000 square feet of ground-level retail.
The metro D.C. apartment market will likely see upward pressure on vacancy in the second half, because of both a surge in new construction and soft job growth, according to a second-quarter report from Marcus & Millichap Real Estate Investment Services Inc.
After the completion of 10,580 units in 2013, the capital area will see an additional 18,000 brought onto the market this year, states the report, which predicts a rise of 80 basis points in average vacancy, to 5.9 percent.
Nonetheless, investor interest in Washington-area multi-family properties remains strong, according to the report, which also cites the high demand for value-added opportunities.