The 49-unit asset is located on the Prince George's County side of Takoma Park--an important distinction because it is not rent controlled, according to David Weber, a broker in Marcus & Millichap Real Estate Investment Brokerage Co.'s Washington, DC office. Montgomery County, on the other hand, does have rent control laws in that portion of Takoma Park, he tells GlobeSt.com. Income levels as well as rents tend to be higher in Montgomery County so multifamily investors try to position themselves as close as possible on the fringe of rent-controlled areas.
That said, Takoma Park is a robust submarket, Weber says, with a strong volume of trades in both counties. The properties, acquired by local investor Eric Denchfield, are typical of the multifamily properties in the area, which tend to be smaller buildings with six to 40 units.
Denchfield's acquisition at 951-57 East West Highway and 6809, 6811, & 6825 Red Top Rd. consists of one 31-unit building with six one-bedroom apartments and the balance as two-bedrooms. The other three buildings contain 18 one-bedroom units.
The portfolio's cap rate was slightly below 7%, Weber says, which is consistent with the submarket. Marcus & Millichap's Rick Struse and Cullen O'Grady, also in the Washington, DC office, secured the buyer.
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