IBJNews

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.
 

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
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
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. Socialized medicine works great for white people in Scandanavia. It works well in Costa Rica for a population that is partly white and partly mestizo. I don't really see Obamacare as something aimed against whites. I think that is a Republican canard designed to elicit support from white people for republican candidates who don't care about them any more than democrats care about the non-whites they pander to with their phony maneuvers. But what is different between Costa Rica nd the Scandanavian nations on one hand and the US on the other? SIZE. Maybe the US is just too damn big. Maybe it just needs to be divided into smaller self governing pieces like when the old Holy Roman Empire was dismantled. Maybe we are always trying the same set of solutions for different kinds of people as if we were all the same. Oh-- I know-- that is liberal dogma, that we are all the same. Which is the most idiotic American notion going right back to the propaganda of 1776. All men are different and their differences are myriad and that which is different is not equal. The state which pretends men are all the same is going to force men to be the same. That is what America does here, that is what we do in our stupid overseas wars, that is how we destroy true diversity and true difference, and we are all as different groups of folks, feeling the pains of how capitalism is grinding us down into equally insignificant proletarian microconsumers with no other identity whether we like it or not. And the Marxists had this much right about the War of Independence: it was fundamentally a war of capitalist against feudal systems. America has been about big money since day one and whatever gets in the way is crushed. Health care is just another market and Obamacare, to the extent that it Rationalizes and makes more uniform a market which should actually be really different in nature and delivery from place to place-- well that will serve the interests of the biggest capitalist stakeholders in health care which is not Walmart for Gosh Sakes it is the INSURANCE INDUSTRY. CUI BONO Obamacare? The insurance industry. So republicans drop the delusion pro capitalist scales from your eyes this has almost nothing to do with race or "socialism" it has to do mostly with what the INSURANCE INDUSTRY wants to have happen in order to make their lives and profits easier.

  2. Read the article - the reason they can't justify staying is they have too many medicare/medicaid patients and the re-imbursements for transporting these patient is so low.

  3. I would not vote for Bayh if he did run. I also wouldn't vote for Pence. My guess is that Bayh does not have the stomach to oppose persons on the far left or far right. Also, outside of capitalizing on his time as U. S. Senator (and his wife's time as a board member to several companies) I don't know if he is willing to fight for anything. If people who claim to be in the middle walk away from fights with the right and left wing, what are we left with? Extremes. It's probably best for Bayh if he does not have the stomach for the fight but the result is no middle ground.

  4. JK - I meant that the results don't ring true. I also questioned the 10-year-old study because so much in the "health care system" has changed since the study was made. Moreover, it was hard to get to any overall conclusion or observation with the article. But....don't be defensive given my comments; I still think you do the best job of any journalist in the area shedding light and insight on important health care issues.

  5. Probably a good idea he doesn't run. I for one do not want someone who lives in VIRGINIA to be the governor. He gave it some thought, but he likes Virginia too much. What a name I cannot say on this site! The way these people think and operate amuses me.

ADVERTISEMENT