TEMPLE HILLS, MD-Earlier this month a bona fide value addmultifamily apartment building traded – bona fide, because whilethere have been a number of such core transactions, the value-addcategory has been relatively slack. Few such opportunities havebeen coming to market, in short. That may change, however, asinterest rates continue to rise.

Even without the changing rate environment, though, it is clearthat slowly this segment of the market has been coming back tolife. In December, The Donaldson Group of Rockville, MD and itsequity partner, New York-based Angelo, Gordon & Companyacquired a 459-unit apartment community here for $38 million in anall-cash transaction. The seller, Tarragon Corporation of New YorkCity, sold the property as part of a reorganization followingChapter 11 bankruptcy last year. Marcus & Millichap’s StaceyMilam and Victor Nolletti represented the seller in thetransaction.

The new ownership will embark on a capital improvement programfor the property, the Heather Hill Apartment Homes, which islocated at 5837 Fisher Road in Prince George’s County. TDGExecutive Vice President Carlton Einsel estimates the company willinvest an additional $8 million. The apartment building, he tellsGlobeSt.com, has been starved for attention and now suffers fromabove-market vacancy and below-market rental rates.