Geist apartment complex sale ends drought of Class A transactions

Back to TopCommentsE-mailPrintBookmark and Share

A Chicago-area buyer has scooped up the first Class A apartment complex sold in this market since 2008.

Oak Residential Partners LLC purchased the 146-unit Grande Reserve at Geist on Oct. 29 and plans a $500,000 upgrade of the property.

Built in 1996 and owned the last four years by Muhammad Becovic, Grande Reserve was listed with Steve LaMotte of CB Richard Ellis for just under $13.4 million. The property on Fox Road at the south end of Geist Reservoir sold for more than $13.3 million.

Its sale for near the list price is a reflection of the dearth of Class A complexes coming to market the last two years. Class A properties—so called because they’re relatively new and located in the most desirable areas—disappeared from the market because buyers were anticipating a flood of distressed properties and were only willing to pay fire-sale prices.

But the expected influx of distressed Class A properties didn’t materialize. The price expectations of buyers and sellers are now in closer alignment, said Richard Wise, a managing principal of Oak Residential.

The Grande Reserve is Oak’s first property in the market. Wise said his company was looking for an attractive property in Indianapolis because the three-to-five year outlook for the local economy is positive.

Oak liked the prospects for the complex itself because there aren’t many apartment properties in the high-end Geist area and little chance that will change. “It’s very insulated from new construction,” Wise said. “A couple of miles out, you might find available land for new construction, but then you’re not at Geist.”

Previously managed by Becovic Management Group, the complex now will be managed by Village Green Management Co. of Farmington Hills, Mich. Occupancy at the complex of one-, two-, and three-bedroom units was 93 percent at the end of October and average rent was $950 a month.

Wise said monthly rents are projected to rise from $100 to $200 for units that are upgraded. Not all units will be improved, but some will get new hardwood floors, granite countertops, new kitchen cabinets and stainless steel appliances. The leasing office, clubhouse and business center also are slated for renovation, and the complex exterior will get new signage and upgraded landscaping. Wise said improvements will begin after the first of the year.   

The deal was financed with a 10-year, fixed rate Freddie Mac loan arranged by Wells Fargo Multifamily Capital. Wise said Freddie Mac and Fannie Mae are still the go-to sources of money for multi-family housing. He noted that life insurance companies also are getting back into the game.  

Grande Reserve is one of two apartment properties sold in recent weeks by LaMotte of CB Richard Ellis. The other was Scandia, a 444-unit complex at 91st Street and Allisonville Road built in 1979. The buyer was St. Louis-based Thiemann Real Estate LLC, another entity just entering the market.  

The price paid for Scandia wasn’t disclosed, but a previous listing agent for the property, George Tikijian of Tikijian Associates, said the seller, Denver-based Apartment Investment & Management Co., wanted approximately $55,000 per unit, which translates into a total of more than $24 million.

AIMCO has been divesting its Indiana portfolio over the last two years to raise money to pay down debt. It has sold at least 17 Indiana properties in that span, and three more sales are on the horizon.

Tikijian said the sale of Pebble Point, a 220-unit complex near Interstate 465 and Crawfordsville Road, is expected to close any day. Tikijian has that listing and is also representing AIMCO in the sale of 328-unit Fisherman’s Village, which is near Pebble Point, and Bayhead Village, a 202-unit property near I-465 and West 38th Street. Bayhead Village is under contract and Fisherman’s Village is expected to be under contract in a few weeks, Tikijian said.

When those sales close, AIMCO, once one of the state’s largest owners of apartment properties, will have one property left in the state: the giant, 2,009-unit Canterbury Green complex in Fort Wayne.

AIMCO pulled Scandia and the other three local properties from the market late last year because offers were trickling in at prices lower than AIMCO wanted to consider.

The company decided in May that the market had improved and put its remaining Indiana holdings back in play.

Apartment vacancies here have fallen and are expected to continue to drop. The vacancy rate was more than 10 percent last year. It has since fallen to 9.2 percent and is projected to reach 8.5 percent by next year, according to statistics provided by Tikijian Associates.


Post a comment to this story

We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
You are legally responsible for what you post and your anonymity is not guaranteed.
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
thisissue1-092914.jpg 092914

Subscribe to IBJ
  1. Here are a few candidates for this new group, "ripped from the headlines." First up, that bizzaro State Senator Brent Waltz; secondly, the unethical Todd Huston, and his contractual arrangements scheme; Finally, but not least of all, the dishonorable Eric Turner. What sayeth you Greg Zoeller?

  2. Good day. I can't hide this great testimony that take place in my life I will love everyone to know it and be partaker that is why I always place it on answer, I am Mrs,Natalie Cuttaia by name, I live in Texas, United State Of America, I want to thank (Mr.Bruce Brandon) for his kindness upon my family life. I never knew that there is still nice lender like this on internet and earth here. Just some Months Back, I was in search for a loan of $100,000,00 as I was running out of money for feeding and rent. I was scammed $6,800 Dollars and I decided not to involve my self in such business again but a Friend of my introduced me to a loan firm due to my appearance and doings. And I told him that I am not interested of any loan deal anymore but he told me that there is still a nice lender who he will recommend me to, and I made a trial and I am most grateful lucky am I today, I was given a loan amount of $100,000.00usd, by this great Company (Bruce Brandon Loan Company) managed by (Mr.Bruce Brandon) If you are in need of a genuine or legit loan or financial assistance and you can be reliable and trusted of capable of paying back at the due time of the funds I will advice you to, contact him via: ( bruce.brandon071@gmail.com ) And you will be free from scams in the internet. All thanks to Mr.Bruce Brandon You are the one who remove me and my family out of poverty. The reason why i am doing this is that, i promise Mr.Bruce Brandon that if i truly got my loan, i will advertize his company and bring customers to his company. Contact him via ( bruce.brandon071@gmail.com )for the Loan you have been looking for..

  3. Hello, We are firm Organization formed to help people in needs of helps,such as financial help. So if you are going through financial difficulty or you are in any financial mess,and you need funds to start up your own business,or you need loan to settle your debt or pay off your bills,start a nice business, or you are finding it hard to obtain capital loan from local banks,contact us today via email mrsroseberrywilkinsfunds.usa@gmail.com So do not let these opportunity pass you by because Jesus is the same yesterday, today and forever more. Please these is for serious minded and God fearing People. Your Name: Loan Amount: Loan Duration: Valid Cell Phone Number: Thanks for your understanding to your contact as we Await Regards Management Email:mrsroseberrywilkinsfunds.usa@gmail.com

  4. The question is, where could they build a new stadium? It seems in the past year, all the prime spots have been spoken for with potential projects. Maybe in the industrial wasteland area a block past Lucas Oil? I think it needs to be close to the core, if a new stadium is built.

  5. Aldi is generally a great shopping experience. Still, I'm sure YOU wouldn't want to shop there, which I consider a positive.