TROY, MI-The locally based Hayman Co. recently got what seems to be a great deal on two apartment complexes in Michigan. The company has purchased the 106-unit Monticello apartment complex in Southfield for $6.1 million, and the 134-unit Ponds at Georgetown in Ann Arbor for $8.4 million. The two properties were sold by New York City-based Sentinel Real Estate, which bought them as part of a 32-complex portfolio in the $532-million takeover of the America First Apartment Investors Inc. REIT in September.

In the takeover deal, sources say Sentinel valued the Monticello at $10.6 million and the Ponds at $12.7 million. “We were able to buy them at substantially below replacement costs,” says Andrew Hayman, EVP with the family firm. “We expect good cash returns once we can get some appreciation in the value of the market. The perception of Michigan has been so negative that it has allowed us to pick up properties from companies that are selling out of the state because they think things are bad, instead of waiting it out. These sellers are willing to sell at any price, these are the type of companies we want to buy from.”

Sources say that in the 1988 sale to America First, the Monticello, at 22700 Civic Center Dr., went for $100,000. The former REIT bought the Ponds, at 2511 Packard St., for $6.1 million.

He says the properties are occupied at about 92% to 93%. The company plans on spending about $1 million in renovations, including renovating the clubhouse and leasing office, and landscaping upgrades, as well as general items such as parking lot and roof replacements. The Monticello rents for about $770 to $1,000 per month, and the Ponds rents from $950 to $1,350 per month.

Hayman tells that even though he expects the Michigan economy to make a rebound in three to five years, the apartment market is going strong in the state. “For the most part, occupancy levels are doing well. The weak residential market is helping multifamily, for 10 years the biggest competition we had was losing tenants to condos and new home sales. Since that business has reduced dramatically, we’re seeing tenants staying longer. Instead of the average one to two years, tenants are now staying three to five years, that lowers the turnover costs as well as helping occupancy.”

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