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RICHMOND, VA-Genesis Properties has put a 223-unit, section 8 apartment building on the market, listing it for $10 million. Washington, DC’s Firoozabadi Group of Marcus & Millichap Real Estate Investment Services is handling the sale.

Called Fairhills Apartments, the complex is located at 1330-1339 Coalter St. and consists of 32 one-bedroom units, 119 two-bedroom units, 16 two-bedroom plus den units, and 56 three-bedroom apartment flats. The property sits on 14.9 acres of land.

Buyers would be typical project 8 investors, that is, companies equipped to handle the management intensive demands that accompany such projects. Despite the additional time required to manage such an investment, Ari Firoozabadi, principal at the Firoozabadi Group, tells GlobeSt.com that the complex can yield a better return than a comparable investment in an office, hotel or industrial facility. It currently yields 9.6% unlevered, according to Firoozabadi.

Furthermore, he adds, a recent Fannie Mae loan quote on this asset came in at a rate of 5.5% at 80% loan-to-value and 1.2 debt coverage ratio for a seven-year term amortized over 30 years. For an investor, the anticipated first year cash flow after debt service and principle reduction would be 24.6%.

In general demand for multifamily apartments in Richmond is strong, particularly affordable housing. We completed a deal last year that was somewhat comparable: it was a C product, but in an A neighborhood. That complex was called Tobacco Row, located at 2 S. 25th St. It traded for $26 million, or $104,000 per unit, to Forest City, Firoozabadi says.

On the market for a few weeks, Fairhills is attracting attention from buyers in Florida, California, New York and Washington, DC including operators backed by private equity money, he says.

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