What’s Turner Impact Doing in Maryland?
- Jun 16, 2015
Turner Impact Capital has acquired the Regency Pointe apartments, a 599-unit community in Forestville, Md., from a joint venture between Angelo, Gordon & Co. and The Donaldson Group L.L.C. for $56 million.
Transwestern’s Mid-Atlantic Multifamily Group brokered the sale on behalf of the seller.
“This property right outside Washington, D.C., in Prince George’s County, Maryland, meets all of our investment criteria,” Robert Turner, Turner Impact Capital’s CEO, told Commercial Property Executive. “I summarize those criteria as ‘the four D’s.’ First is density—having 350,000 or more residents in a 3-5 mile radius around the property. Second is diversity, with a resident population that is 50 percent or more ethnically diverse. Third is demand, where we’re seeing high and rising inflation in rents.”
That is certainly the case in Prince George’s County and all of metropolitan Washington, D.C., as a recent study found that almost a third of households in Washington making between 30 and 50 percent of Area Median Income are spending more than half of their income in rent.
“And the last ‘D’ is doing good—where we have the opportunity to meaningfully improve people’s lives both by preserving the affordability of the property, and by enriching the community through resident-focused human services,” Turner added. “These services might entail offering reduced rent, or no rent at all, to local school teachers in exchange for having them staff an after-school homework center for students on the property one night a week. Or it might involve giving free or reduced rent to law enforcement officials if they agree to organize a community watch program and keep their squad car parked in a prominent place on-site, to promote safety.”
The Regency Pointe garden-style apartments have been extremely well-maintained with more than $15 million invested in capital improvements. Turner Impact Capital has an opportunity to substantially increase rental revenue by continuing in-unit renovations and fully realizing the cost savings stemming from the recent utility conversion, along with initiating a pass-through of water/sewer expenses.
Located in the Joint Base Andrews region, the property provides excellent access to major employment centers with close proximity to the Capital Beltway, Suitland Parkway, Pennsylvania Avenue (MD-4) as well as nearby Largo, National Harbor and Downtown Washington, D.C.
According to Turner, Turner Impact Capital is different from other investors in several important respects.
“We will make sure our units are safe and comfortable, but our goal is to preserve affordability and enrich the community through resident-focused services,” he concluded. “This will make our properties a great place to live while ensuring we earn a superior risk-adjusted return for our investors. Harnessing market forces in this way will enable us to have a truly significant impact in high-need urban areas throughout the United States, protecting workforce housing and its residents against the relentless increase in rental rates we’re seeing nationwide.”