ALEXANDRIA, VA-New York City-based Praedium Group and Dallas-area Milestone Group have formed a JV to acquire a multifamily portfolio here for $125.5 million. The Alexandria Portfolio, as it is called, consists of two complexes—Edgeware Lane and Palladium Court—which total 556 units
Edgeware Lane consists of 424 units spread throughout 16 buildings and Palladium Court is comprised of 132 units in five buildings. Randal W. Howard of Moran & Co. represented the seller in the deal. The seller was an institutional investor that did not want to be named, Christopher Hughes, principal of the Praedium Group and head of acquisitions in the Northeast region, tells GlobeSt.com.
The JV snapped up this portfolio because it expects it will deliver yield both on a current basis and in the future after improvements have been made to the properties, Hughes also says. “This was a value-add play for us. We plan to invest multiple millions of dollars into the properties in exterior improvements and improvements to the units.” Hughes declined to discuss specifics about project yields. The portfolio is 95% occupied.
The new owners say the sales price fits their view of supply and demand dynamics in this particular submarket. Multifamily pricing is getting hot, and possibly overheated, in some parts of Washington, Hughes says. “There have been deals in the market where we would not have been successful bidders for that reason,” he says.
He hopes to make similar investments in the DC area market, although whether another portfolio will come to market is unclear. “Available multifamily portfolios are becoming more rare,” he says.
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