Apartment REIT Acquires 394 Units

[IMGCAP(1)]PORTSMOUTH, VA-Grubb & Ellis Apartment REIT has acquired two buildings here--a change for the REIT whose assets are almost exclusively based in Texas. The two apartment buildings are the Myrtles at Olde Towne and the Heights at Olde Towne. The selling price or sellers were not disclosed.

Myrtles is a 246-unit property, with an 89% occupancy rate, totaling more than 221,000 rentable sf on 10 acres. Built three years ago, the six three-story apartment buildings have five floor plans ranging in size from 751-sf one-bedroom/one-bath units to 1,137-sf two-bedroom/two-bath units.

[IMGCAP(2)]The Heights is a 148-unit development of more than 118,000 rentable sf on more than 3.7 acres. It was built in 1972 and renovated between 2003 and 2006. The Heights, which is 94% occupied, consists of two eight-story apartment buildings with units that range from 604-sf one-bedroom/one-bath apartments to 1,122-sf three-bedroom/three-bath.

CIO Gus Remppies tells GlobeSt.com that the company plans to spend $1 million in renovations for the Heights. "The Myrtles is nearly brand new and looks fantastic--it doesn't need any repositioning."

The previous owner of the Heights had put in about $35,000 per unit in renovations. The REIT plans to upgrade the kitchens and baths as well as build a new clubhouse. It will also add another four to six units to the property by transforming the rental office into living space.

Outside of one holding in North Carolina, the REIT's portfolio is based in Texas. Remppies says this was more by accident than design. "Our investment focus has been to look for properties that are relatively new in marketplaces that are showing above average job growth and other such demographics. It just so happened, the first properties we looked at that met those criteria were in Texas." He says the company plans to acquire between 10 to 12 properties this year, with an eye towards establishing a presence in other Sunbelt states.