PHILADELPHIA-In a trade that illustrates several trends in the regional multi-family market, Marcus & Millichap sold a 160-unit apartment property in northeast Philadelphia for $13 million, with the buyer assuming an existing 5.5% interest loan, GlobeSt.com has learned.
The brokerage did not identify the buyers and sellers of Beechwood Gardens, which traded for $81,250 per unit.
However, Clarke Talone of M&M’s Phildadelphia office says the company sold the asset four years ago to the current seller – who is based in New York – at a time when “not much was trading.”
“The sellers did a good job managing the property and have consistently maintained occupancy in the mid-to-high 90% range,” says Talone.
Talone and his M&M colleagues Ridge MacLaren and Andrew Townsend represented both sides in the current transaction. The buyer, based in Philadelphia, worked with the investment specialists for several years to find the right property to purchase.
“This transaction is indicative of the fact that there is an abundance of capital pursuing quality multifamily assets right now,” says MacLaren. “In fact, the supply of capital far outweighs the available inventory of on-market properties.”
For the buyer, says Talone, “Beechwood Gardens was an opportunity to break into a strong apartment market with immediate scale.”
Pre-payment penalties on the seller’s mortgage loan made it advisable for both sides to pursue a deal involving a loan assumption,he says, even though the interest rate on the loan is higher than current rates.
“The assumption process took some time, but the buyer and seller were very cooperative with one another,” adds MacLaren.
“Well-priced real estate in solid in-fill locations will continue to generate significant buyer interest,” MacLaren says and M&M expects to see more such strategic transactions.
Beechwood Gardens is located at 9805 Haldeman Ave. close to Route 1 and Interstate 95. Built in 1967 on 5.7 acres, the building has 80 one-bedroom units and 80 two-bedroom apartments, the majority of them renovated.