Broadtree Buys Local MF Holdings In $138M Portfolio Deal
Two of the three properties in the 633-unit portfolio are located in Baltimore.
BALTIMORE–Rochester, NY-based Broadtree Residential has acquired a three-asset multifamily portfolio for $137.5 million from affiliates of Chesapeake Realty Partners. Two of the properties — 1901 S. Charles and 2 East Well — are local and the third is located in the Harrisburg, PA, area. The total size of the portfolio is 633 residential units and two commercial units. All three communities are managed by WPM Real Estate Management, a Baltimore-based third-party property manager.
Broadtree Residential, a private REIT, acquired the portfolio via its first UPREIT transaction. (An UPREIT, or “umbrella partnership real estate investment trust,” is a structure that allows a REIT to defer or avoid capital gains tax when selling appreciated real estate. Essentially, property owners contribute real estate to the fund’s operating partnership on a tax-deferred basis in exchange for equity, in the form of Operating Partnership Units.)
In this particular transaction, the sellers contributed more than $25 million of equity into the operating partnership of BTR.
Broadtree CEO Chris Czarnecki said that this deal is the first of what it hopes will be many UPREIT transactions. “Broadtree operates in a competitive multifamily marketplace, and one of the ways to create shareholder value is via the sourcing and execution of complex UPREIT transactions.
About the Portfolio
1901 South Charles is a Class A mid-rise multifamily community developed in 2012 by CRP. The property, which consists of 193 units, was the first wood-frame residential building in Baltimore to receive LEED Gold certification.
Built in 2015, 2 East Wells is a Class A mid-rise multifamily community. The property consists of one five-story building with 152 units. Two ground floor retail spaces are tenanted by the Baltimore Soup Company and Minnow, a high-end seafood restaurant. 2 East Wells is a green community built to LEED Gold standards.
The Overlook in Harrisburg is a Class A mid-rise multifamily community built in 2014, located in the Camp Hill submarket. It has 288 units within six residential buildings. The community was built to LEED Silver standards.