FCP Acquires Two Apartment Communities for $51M

FREDERICK, MD-Federal Capital Partners has acquired two multifamily properties here for $50.5 million. Dubbed the Brookside and Overlook Manor, located at 108 Willowdale Dr. and 1208 Alban Ct., respectively, they comprise a total of 722 three-and-four story garden apartments.

The company acquired the properties at a discount to replacement cost, it said in a statement. They will also add to the firm’s operational efficiencies, as it already owns a nearby property called Crystal Park. CB Richard Ellis brokered the sale and Wells Fargo provided the debt financing. The purchases are the latest investment FCP has made, bringing its total unit size to 7,000 throughout the Mid-Atlantic.

FCP VP Jason Bonderenko declined to tell GlobeSt.com who the seller was, but he did say that it was not a distressed sale. Instead, this transaction falls into FCP’s sweet spot of value-add reposition. The properties’ occupancy rates are in the mid-90s, he says, and the company is planning to make some upgrades to the common areas. In general, he adds, “We really like the fundamentals of Frederick, MD.”

The company is likely stepping up its investment footprint via the launch of a $500-million equity fund. FCP filed the necessary paperwork with the Securities and Exchange Commission and has declined to discuss its details, presumably because it is still in fund-raising mode. The fund, called FCP Realty Fund II, had commitments of $122.5 million from at least seven investors several weeks ago. The goal is to raise another $377.5 million from investors, according to managing partner Esko Korhonen.

In December 2010, the firm closed on a $13.75-million acquisition of a multifamily property in Baltimore called the Munsey. It is an 18-story, 146-unit building with 4,000 square feet of ground-floor retail. FCP also recently partnered with Grubb Properties on the acquisition of two apartment communities located in Raleigh, NC and Chapel Hill, NC. Valued at $42 million, the new venture includes Riverwoods apartments located on Six Forks Road in Raleigh, NC and the Glen Lennox apartment community on Hamilton Road in Chapel Hill, NC.