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.