TEMPLE HILLS, MD-Another day, another multifamily acquisition for Federal Capital Partners. The company has snapped up two complexes here for an undisclosed amount, although FCP vice president Jason Bonderenko tells GlobeSt.com that they traded at a pro forma 7 cap rate. “For the seller’s NOI, that would probably have been a little below 7,” he adds. “It will take time for us to improve the rents and occupancy, as both metrics are below market.” The seller is a local partnership of several individuals.

FCP’s acquisition of these properties—Oxon Park and Oxon Terrace, two neighboring garden apartment complexes comprising 390 apartments—is nothing new for the company. It has invested in 17 multifamily properties in the Mid-Atlantic to date this year, for a $400 million transaction volume. Indeed, in the past three weeks alone, the company has closed on four Washington area apartment buildings for a total of 946 units.

However, while investors like FCP are likely to continue to clamor for stable income-producing apartment properties for some time, interest is also rapidly growing in ground-up residential construction, according to data collected by MAC Realty Advisors. MAC is currently shopping some $540 million in ground-up financings and reports strong demand for these types of opportunities from the capital markets. Residential construction is significantly below typical permit levels, the firm says, and on a relative basis the region’s prospects compared to other parts of the country are still quite strong. “There remains a consistent backlog of investors trying to expand into the DC area,” said Bruce Levin, executive director at MAC, in a statement. “Even as some investors rotate out of the region or product-type, many others are eager to take their place.”

Recently, for example, MAC placed a joint venture equity investment for the construction of the Washington Gateway apartment project in Baltimore, MD. A life company is providing the land acquisition and pre-development funding for the construction of 303 residential units and 18,600 square feet of retail. 

FCP, as well, has invested in development this year, Bonderenko reports, and is currently eyeing a few additional deals. Last week, for example, the company announced that the St. Charles Cos. is beginning infrastructure work on Fieldside, the newest neighborhood in its planned community in Southern Maryland. Ryan Homes will be the builder within Fieldside. FCP acquired the St. Charles Cos. in December 2009 through its FCP Fund I, L.P.

Meanwhile, the company will continue its focus on its core competency—value-add acquisitions of apartment buildings like the Oxon Park and Oxon Terrace. Located at 2525 and 2607 Southern Ave., they are within walking distance of both the Southern Avenue and Naylor Road Metro stations and one mile from the future Department of Homeland Security headquarters, now under construction at the St. Elizabeth’s Hospital site. FCP plans to invest $3.3 million in their renovation. As part of the deal, it assumed above-market CMBS debt.