The Milestone Group has acquired a three-property multifamily portfolio with 870 units in Fairfax County, Virginia. While the purchase price was not disclosed, the off-market acquisition was through a loan assumption that saved significant prepayment costs, according to the privately held real estate investment management firm.
Milestone purchased the portfolio through its discretionary value-add fund, Milestone Real Estate Investors V, bringing the fund to nearly 6,000 multifamily units and its overall portfolio to 10,000 units. Fund V focuses on providing growth for investors with risk-adjusted, value-oriented opportunities.
“We focus on creative deal structures to generate win-win solutions with sellers. In this case, we were able to save over $20 million in prepayment costs by assuming the existing financing,” said Chris Bartlett, head of capital markets. “Although loan assumptions can be an arduous process, a significant number of our investments during the last five years have been through loan assumptions, which we believe differentiates us when working with sellers as we are able to efficiently work through the process while saving substantial prepayment penalties.”
The value-add portfolio includes:
- Ellipse at Fairfax Corner: Built in 1989, the 404-unit garden-style community in Fairfax features one- and two-bedroom apartments near the Fairfax Corner and Fair Oaks Mall retail centers and major transit corridors;
- The Townes at Herndon Center: The 2002-vintage townhome communities is comprised of 216 units with two- and three-bedroom open floor plans near historic downtown Herndon; and
- Windsor at Fair Lakes: Built in 1988, the 250-unit garden-style community in Chantilly includes one-, two-, and three-bedroom luxury apartments within walking distance to Whole Foods and minutes to Fairfax Corner and Reston Town Center.
“The properties in this portfolio are well-located and of institutional quality, providing Milestone with a strong mark-to-market opportunity to improve performance through strategic capital enhancements and a sophisticated operating platform,” said Jason Wise, vice president for acquisitions. “These communities reflect Milestone’s continued interest in acquiring assets in resilient, high barrier-to-entry markets, close to major employment centers, great schools, and abundant amenities. We look forward to executing our business plan and modernizing the assets to improve their position in the market.”