UIP just made its first investment for that fund, called Washington Residential Fund III: the acquisition of Courtyard Park Apartments, a 94-unit, garden-style apartment community located at 4201-4213 Oglethorpe St. in Hyattsville, MD. UIP made the investment together with Stonebridge Investments, B.V. of the Netherlands for $4.1 million, or $43,617 per unit. The seller was CYP, Inc. of Maryland. The BMC Property Group of Bethesda and the Milam Group of Marcus & Millichap brokered the transaction. Courtyard Park is 97% occupied. It traded at a 7.5% to 8% cap rate, Schwat says.
The first WRF fund invested in four properties in Prince Georges County; the second fund acquired four properties in Dupont Circle. The third generation is now looking at stabilized deals that require little capital improvement dollars, Schwat says. Because of that investment profile, the company is able to leverage Fannie Mae and Freddie Mac money.
The $100 million fund, by contrast, is an opportunistic play, seeking out deals from bank sales, foreclosures and other distressed situations. That fund is 60% levered and is largely committed to six deals under contract.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
