A Brooklyn-based real estate investment firm is spending $55 million to purchase a local apartment portfolio from one of the country’s largest owners of multi-family housing.
Hampshire Properties LLC purchased six apartment communities from Denver-based Apartment Investment & Management Co., known as AIMCO. The sale totals more than 2,100 units, including the Westlake and Wind Drift complexes on the city’s west side and the Woods Edge, Villa Nova, Spyglass and Riverwood properties on the north side.
Steve LaMotte, Amy Burmeister and Dane Wilson of CB Richard Ellis brokered the deal.
The sale represents Hampshire’s first purchase in Indianapolis. The company operates retail centers, office and industrial buildings and apartment complexes in Houston, New York and several other markets around the U.S. and Canada.
Tomas Rosenthal, the company’s president, said the privately held firm had been looking at the Indianapolis market for 12 to 18 months.
“We got the properties for a fairly decent price … and that’s what made us buy it,” he said. “Since it was a bulk sale of a few properties, we found it economically wise to come to Indy.”
The properties first went on the market in January 2008, Burmeister said, only to be “caught in the capital markets net” that complicated financing. Still, she said firms are attracted to multi-family housing because that segment of real estate remains relatively stable.
“It’s very favorable asset type,” she said. “Risk is obviously spread across a lot of units, default rates are still very low … and the fundamentals are good.”
Hampshire plans to put “substantial investment” into each property, Rosenthal said, although he couldn’t give an exact figure. Some buildings need exterior enhancements, while others will receive interior upgrades, he said.
Locally based firms Flaherty & Collins and the Buckingham Cos. will manage the communities.
AIMCO has been shedding its Indianapolis properties for the past five years as it looks to focus on other markets. The company’s eight remaining properties in the area are now for sale and listed with Tikijian & Associates.
Those include the 1,260-unit Lake Castleton complex at 7601 Carlton Arms Drive, the 440-unit Scandia complex near 96th Street and Allisonville Road and the 166-unit Quail Run community in Zionsville, among others.
“They’re all really well located, generally larger properties,” said George Tikijian.
Together, the eight properties could sell for up to $150 million, he said, although they are not being marketed as a portfolio. Instead, buyers will likely purchase them individually or in small groups, he said.
“Right now, where capital is precious, I would say a large portfolio would probably sell at a discount to individual properties,” Tikijian said.