Two REITS, Two Deals, $154M

WASHINGTON, DC-Two REITs have closed on two separate multifamily projects in the DC area over the past few days, for a total of $153.5 million. One deal, reported by the Washington Business Journal, is UDR’s acquisition of View 14 on 14th Street NW for $104 million, or $670 per square foot. A call to the REIT was not returned in time for publication. In the second transaction, AvalonBay acquired the 210-unit Yale Village Townhomes in Rockville, MD, for $49.5 million. The seller is Polinger Shannon & Luchs Co.

It is no accident these well-priced deals closed thanks to REIT money, says Allen Manesh, president of Ideal Realty Group, who brokered the Yale Village transaction. “There are two main buying groups out there--funds and the REITs,” he tells GlobeSt.com. Funds, from Manesh’s perspective, are outspending, but only by a bit, the REITs in terms of acquisitions. However REITs have a leg up in the marketplace because of their ability to tap the capital markets and their experience in managing properties. “They can lower the cost of operations, therefore creating a better cap rate,” he says. He points to another example of a REIT swooping in on a local multifamily property: Equity Residential, which recently acquired, among other apartment buildings, 1500 Massachusetts Ave., NW, for approximately $96 million. The building is not the usual luxury or class A product Equity buys but it was still a good bet for the REIT, Manesh says. “There is not a whole lot of class A multifamily properties available in the DC area anymore so what they got with 1500 Massachusetts was a great location inside the Beltway.”