Washington REIT Pays $58M for DC Apartment Complex
- Sep 08, 2008
With the shelling out of $58.3 million, Washington Real Estate Investment Trust has added a 374-unit luxury apartment community to its portfolio. Located in a relatively upscale neighborhood in northwest Washington, D.C., The Kenmore has a price tag of $155,750 per unit . The seller, Smith Property Holdings 4411 Connecticut L.L.C., had owned The Kenmore since 1997, when it acquired the 11-story building for $15.6 million. Carrying the address of 5415 Connecticut Ave., NW, The Kenmore sits on a nearly 1.7-acre parcel within a stone’s throw of Chevy Chase, which is just over the Maryland border. The 270,000-square-foot property was originally developed in 1948, and in 1996, underwent a substantial renovation. At the time of the transaction, the building was 96 percent leased. Spurred by sustained population growth and continued job creation, the Washington, D.C. area apartment market continues to be one of the strongest in the nation, according to a recent report by Cushman & Wakefield; the real estate services firm’s Apartment Brokerage Services division marketed The Kenmore on behalf of the seller. Increased demand and a dwindling pipeline of new development since the close of 2007 have led to a mid-year vacancy rate of 3.6 percent in the MSA, and just 2.8 percent in the District. Despite the fact that the credit crunch has put a damper on real estate transactions in general, the area’s desirable fundamentals are still proving to be a magnet for investors. Multifamily sales in the Washington, D.C. region reached $1.3 billion by the close of the second quarter, compared to a total of $2.2 billion for all of 2006. While sales for 2007 totaled $3.4 billion, the figure was inflated due to Archstone-Smith’s $1.6 billion disposition of a single portfolio of properties. WRIT’s acquisition activity this year, however, has been in the medical office property market. In May, the company acquired a 36,000-square-foot building in Sterling, Va., for $6.5 million, and in April, WRIT spent $19.5 million on the 85,300-square-foot Lansdowne Medical Office Building in Loudoun County, Va. Headquartered in Rockville, Md., WRIT is a self-administered, self-managed equity REIT that targets income-producing properties in Metropolitan Washington, D.C. The company’s portfolio of 91 assets includes 26 office properties, 22 industrial/flex properties, 17 medical office properties, 14 retail centers, 12 multifamily communities, as well as developable land.