LEXINGTON, KY-Zaragon, based in Chicago, has put out for sale its three-property apartment portfolio in Kentucky for $52.6 million. The 774-unit portfolio includes two apartment buildings here and one in Louisville, KY.

Todd Stofflet with Hendricks & Partners tells GlobeSt.com that Zaragon decided to sell its Kentucky apartments and focus more on student housing properties. The company has a portfolio of 3,500 apartments, 1,100 manufactured housing units, 1.2 million square feet of office and industrial space and several thousand acres of vacant land in the Midwest and on the East Coast. However, the firm has been working most lately on developing and purchasing student housing, most recently Zaragon Place at 619 E. University near the University of Michigan in Ann Arbor, MI.

The Kentucky sites include the 216-unit Shillito Park and the 330-unit Old Farm in Lexington and the 228-unit Regent Park in Louisville. The two complexes in Lexington were built in the late 1980s, and the other property was built in 1972, and updated in 2002. All are more than 90% occupied, with rents ranging from $549 to $969 per month.

Stofflet says the Kentucky market is very tight, especially in Lexington, which is subject to the Urban Service Boundary that limits new construction to infill sites within the city. Stofflet says because of this restriction, there have been only about 275 units added to the Lexington market in the past three years, and apartments there average about 2% to 4% annual rent growth. “The restriction has kept prices strong and cap rates down for Lexington properties,” he says.