New Boston Fund Acquires Rental Complex for $26M

MIDDLETOWN, CT-Marking its first multifamily acquisition in the Nutmeg State, New Boston Fund has purchased the Windshire Terrace Apartments property here for $26.2 million. The Boston-based REIT bought the 226-unit, garden-style complex from locally based Forest Glen Associates in a deal valued at $116,000 per unit or about $111 per sf. While the deal marks the company's first multifamily property holding here, New Boston Fund is a significant owner of commercial office properties in Connecticut. The firm owns more than two million sf of space in Connecticut, including: 100 Pearl St., a 280,000-sf office building in Downtown Hartford; 500 Enterprise Dr., a 308,000-sf office building in Rocky Hill; and 80 Lamberton Rd., a 160,000-sf office building off Interstate 91 in Windsor that it is currently being marketed for sale.

The Windshire Terrace complex, which was built in 1999, is located at 72 Forest Glen Circle, includes: 11 three-story apartment buildings, along with a clubhouse, pool, fitness center, laundry facilities and storage areas. Every unit at the property offers two bedrooms.

Phillip K. Bakalchuk, senior vice president of acquisitions for New Boston Fund, says the purchase of Windshire Terrace, "fits in well with our strategy, continues to build our New England presence and continues our expansion into the multifamily residential asset class. We view this as a strong value-added opportunity that offers a relatively high risk-adjusted return for a five-year-old stabilized asset."

Bakalchuk adds that New Boston Fund acquired the asset for a price well below the price being paid for older apartment properties in the submarket. In addition, the property's rental rates are significantly below comparable properties, offering the opportunity to add value, he says.

Dale Reese, vice president, regional director of Connecticut for New Boston Fund, says the firm is seeking out other assets of similar quality to the Windshire Terrace property to build its residential portfolio in Connecticut. In recent years, New Boston Fund has expanded its multifamily portfolio along the East Coast, including the purchase of Dulaney Crescent Apartments, a 264-unit complex in Towson, MD in October 2004 and Washington Crossing Apartments, a 205-unit complex in Woburn, MA in November 2004. The firm is also pursuing other residential development and acquisition ventures in Massachusetts, Connecticut and Florida, company officials say. Mike Stone of CB Richard Ellis was the broker in the transaction.