MARLBOROUGH, MA-A 274-unit luxury apartment complex in this suburb west of Boston is among four multifamily assets sold by Rreef America, with Steven D. Bell & Co. paying $45.5 million to acquire the five-year-old Jefferson at Wheeler Hill. Based in Greensboro, NC, the real estate investment firm is making its first foray into New England via the purchase, which also includes assets in Georgia, Pennsylvania and Texas. An exact price on the portfolio was unavailable, but it is said by one source to be "well in excess" of $100 million.

Besides the Marlborough development, Bell also bought Brookview at Elkins Park in suburban Philadelphia, which has 217 units; the 504-unit Residences at Morgan Falls in Atlanta; and Villa Miranda in Dallas, the largest of the four communities at 590 units. The newest is the 56-acre Jefferson at Wheeler Hill, one of several Massachusetts multifamily projects built by JPI Texas Development this decade. That firm, which has typically sold the properties after completion, traded the Marlborough project to Rreef in 2003 for $45.7 million. Earlier this year, Rreef acquired another JPI complex in Dedham, MA.

JPI's management arm runs Wheeler Hill as part of a 59-property contract struck last year to operate Rreef apartments nationwide. Steven D. Bell & Co. principal Jon Bell tells GlobeSt.com that his firm will manage the properties acquired, all of which were heretofore operated by JPI. Bell says his firm will likely re-name the communities bearing the Jefferson brand.

Now in its third decade, Steven D. Bell & Co. has been active divesting properties this year, including the Q3 sale of 39 multifamily assets in the southeast for $677 million. Jon Bell reports the firm has traded $875 million of apartment holdings in 2007, but is armed with a new fund that could buy upwards of $1 billion in the coming year, using its own leverage and funds provided by institutional capital and high net-worth investors, plus money from tenant-in-common sources. All of those elements are in the Rreef portfolio sale, explains Jon Bell, with Bell Fund II investing into the quartet of properties whereas other participants selectively bought pieces.

Atlanta and Dallas are two markets Bell is familiar with, but Jon Bell indicates the company will entertain future opportunities in the northeast, the one region where it has not had a significant presence. "We would look to expand there," he says of Massachusetts, citing operational efficiencies in running multiple assets. And while the firm itself is new to the area, Jon Bell says he and other members of the company have experience in New England's real estate markets.

Broker Malcolm McComb of CB Richard Ellis predicts the landlord will be welcomed to the area. "They have a sterling reputation," says McComb, part of the multifamily team in CBRE's Atlanta office that negotiated the Rreef portfolio transaction.

As with Bell, McComb declined to discuss specifics of the pricing, but describes the assets as first-class developments that Rreef kept well-maintained during its tenure. Built in 1990, the oldest is the Philadelphia complex, while the Atlanta and Texas properties opened in the mid-1990s. The institutional quality attracted substantial interest in the portfolio, but McComb says Bell's ability to handle a diverse geographic portfolio helped the firm win out, as well as its ability to secure funding in the challenging financial environment that slowed commercial sales late in 2007. "They did a real nice job assembling the capital," says McComb.

"We like the capital crunch," relays Bell, given that it has settled down some of the aggressive pricing seen in the first half of 2007. Rising capitalization rates should help make deals more palatable, he says, adding that the company's clients are still likely to fare better on returns than they would by buying treasuries or pursuing the volatile stock market. "We're looking forward to 2008," says Jon Bell, whose firm is especially concentrated on multifamily. That group had its best year ever in six years, he notes, and apartment occupancies and rental rates appear solid for the near term, he says.