AvalonBay to Develop 1,000 Units in Chicago
Chicago—AvalonBay Communities has acquired a 3.5-acre site here for a new 1,000-unit apartment community, Avalon on South Clark. The development cost is approximately $280 million.
The community will include three towers and garage parking. Amenities will include exercise facilities, a park, a picnic area, an outdoor running track, and a pet park. Most units will have views of Lake Michigan.
“In the coming years, we expect to continue to increase our investment in the Chicago marketplace, both downtown as well as throughout the Chicago suburbs,” said Bryce Blair, CEO of AvalonBay, an Alexandria, Va.- based real estate investment trust (REIT). The firm already owns and manages seven properties in the Chicago area.
Mammoth Project Sells in Boston Suburb
Peabody, Mass.—Simpson Housing has purchased a 446-unit luxury complex in this Boston suburb for an undisclosed price. Apartment Realty Advisors arranged the sale.
Highlands at Dearborn consists of one-, two-, and three-bedroom units in 18 separate three- and four-story buildings on nearly 25 acres. The physical size of the complex reportedly makes it one of the largest apartment developments in Massachusetts. The development includes a clubhouse, a media and billiards room, a fitness center, and an outdoor entertainment area.
Denver-based Simpson Housing is in the permitting process on three sites in the Boston area that are expected to contain a total of 700 units.
Bascom Makes 23rd Texas Acquisition
Bachman Lake, Texas—Texas—The Bascom Group has acquired Warwick Apartments in this Dallas suburb, making the deal the firm’s 23rd purchase in Texas in less than two years. CWCapital was the seller.
The 340-unit property consists of 11 two- and three-story buildings on six acres. At the time of the acquisition, rents averaged $442 per unit. Bascom expects the rents to increase by 13 percent on average after it repositions the property. The firm plans to build a playground and a new picnic area, in addition to fixing structural problems at the complex.
Luxury Rentals, Condos Planned Near Austin
Round Rock, Texas—Texas—Boston Capital Real Estate Partners and Trammell Crow Residential are teaming up to develop Alexan Palm Valley, a 340-unit Class A apartment complex located 15 miles north of Austin, Texas.
The development will feature 16 twoand three-story buildings containing 144 one-bedroom, 168 two-bedroom, and 28 three-bedroom units. The average unit size is 971 square feet. All units will include vaulted ceilings, patios with storage, walk-in closets, large bathtubs, and ceiling fans. Amenities will include a fitness center, a swimming pool, an Internet café, and a business center.
The site is situated near two new toll roads, State Highways 45 and 130, which are spurring substantial development in previously undeveloped areas.
Alterra Acquires Atlanta Community
Atlanta—Alterra Capital Group has acquired a 348-unit apartment community here for $11.5 million. The seller was Sweetwater Cove Apartments, LLC.
The Pembrook Group, based in New York City, provided a $10 million loan for the acquisition. Sweetwater Cove was 86 percent occupied at the time of the sale. It will be renamed Mableton Reserve Townhomes. Alterra raised the remaining equity necessary to finance the purchase.
The firm plans to spend nearly $500,000 to renovate the property, which was built in 1970. The community spans almost 30 acres and contains two-story townhomes. Refurbishments will include replacing roofs, building a new leasing center and a soccer field, and new landscaping. Renovations are under way and are expected to be complete by the end of 2007. Alterra expects its investment to earn an internal rate of return of 44 percent over the next three years.
Big Apartment Purchase in Nashville
Nashville, Tenn.—New Dawn Cos., based in Davies, Fla., has acquired four multifamily properties here for $146.5 million. The sale is reportedly Nashville’s largest apartment sale to date. The seller was not disclosed.
“Buyers who have been priced out of the core markets are taking a serious look at the opportunities in more tertiary markets such as Nashville where the fundamentals are strong and where quality institutional multifamily properties are performing well,” said principal Vince Lefler of Apartment Realty Advisors, who helped arrange the sale.
“We evaluated numerous offers from REITs, tenants-in-common owners, pension funds, and a number of private capital groups, which speaks to the broadening investment criteria we’re seeing among buyers in the market. This recent sale demonstrates that the market, despite the recent capital markets woes, is still very active,” said Derrick Bloom, principal of Apartment Realty Advisors.
The transaction consisted of four apartment properties—Arbors of Brentwood, Cambridge at Hickory Hollow, Cherry Creek, and Preakness—and a 79-acre site.
Condos Flip to Apartments in Tampa
Tampa, Fla.—A developer has decided to turn its waterfront project here from luxury condos to a rental community.
Garrison Developer Group, based in Sarasota, Fla., originally planned The Preserve at Alafia as an upscale condominium community. After realizing that its units might not sell in a market affected by the current credit crunch, the developer is turning the community into 351 rental units. The development cost is $100 million.
The company is offering units for lease during the beginning stages of construction at the community, located 10 minutes from downtown.
Luxury Project Receives Construction Financing
Scottsdale, Ariz.—George Smith Partners has arranged a $57.8 million construction loan to finance the development of Reflections on the Canal, a 100-unit luxury apartment and condominium community here.
Demand for luxury rentals continues to remain strong in the Scottsdale area, said Steve Bram, principal/senior director with Los Angeles-based George Smith Partners. The project will include 32 townhome units and 68 condos ranging from 1,715 to 2,883 square feet. Construction was scheduled to begin in October, with units delivered in two phases beginning in March 2009.
Amenities will include a fitness center, a pool, a clubhouse, and a business center. Units will include hardwood cabinets, gas fireplaces, and accent lighting.
The financing was a partialrecourse, 36-month construction loan. The name of the lender was not disclosed.
High-Rise Condos Planned in Seattle
Seattle—The Executive Group and the Fana Group are teaming up to build a $200 million mixed-use high-rise in the middle of downtown. The AVA will contain a 190- room hotel and luxury condominiums.
Approximately 200 units are planned to sit atop the hotel. AVA will also feature a 4,000-square-foot ground-level restaurant, a spa, a business center, and meeting facilities.
The project is scheduled to get under way in 2008 and open in 2010. Unlike many cities, Seattle seems unaffected by the cooling of the condo market.
A number of condo conversions are taking place at Seattle’s outer edges, but most new condo projects are being built downtown—frequently as part of mixed-use developments. A joint venture involving Avalon Holdings and Starwood Capital Group Global is developing 1 Hotel & Residences, a 23-story project that will cost $200 million to complete.
Also, Vulcan Real Estate is constructing 2201 Westlake, which will feature 135 condo units, as well as office and retail space.