Ten apartment communities have changed hands for a total of more than $240 million in the Wilmington area in the past two months.
The sales are highlighted in a report compiled by Multifamily Realty Advisors, which noted that the transactions, with the most recent occurring Nov. 13, involved 2,679 units.
The 2014 sales represent a record -- perhaps an all-time record -- in terms of transaction volume for the Wilmington area, where “not a single apartment property of any significance” was sold from 2009 to 2011, said Richard Cotton, a broker and managing director of Multifamily Realty Advisors.
Cotton’s company, a regional commercial real estate firm that focuses exclusively on the apartment sector, represented the seller during 2012 and 2013 in the sale of four student housing communities for a total of more than $55 million.
Nine of the 10 purchases in the Port City this year came as a result of investment company portfolio sales, Cotton said.
The Nov. 10 purchase of Hanover Landing, formerly known as Berkshires at Pecan Grove; Osprey Landing; and Wimbledon Chase was part of a Berkshire Property Advisors portfolio sale and accounted for more than $38 million of the $240 million, the report states. The buyer was Starwood Capital Group, Cotton said.
The joint venture of Bell Partners and DRA Advisors sold Cape Harbor, Clear Run, Forest Hills, Mill Creek, Crosswinds and Creek at Forest Hills to Lone Star Funds on Oct. 10 for more than $182 million, the report says. The Wilmington communities were just six of 64 in the Bell Partners-DRA Advisors portfolio sale, valued at $1.8 billion.
“This portfolio has generated strong cash yields and has benefited from our active asset management approach throughout the hold period,” said David Luski, president of DRA Advisors, in a news release about the sale. “The end result is a great deal for our clients, with returns well ahead of expectations."
Bell Partners continues to manage all of the properties for Lone Star Funds.
Outside of the portfolio sales, Governours Square off South College Road, built in 1974, sold for more than $14.6 million on Nov. 13, the Multifamily Realty Advisors report states. The buyer is listed as Governours Square Club LLC on the deed.
In general, apartment projects are considered low-risk investments.
“There is a great demand for apartment investment because apartments are not as risky as, say, office and retail,” said Cotton, whose firm operates in Wilmington and the Triangle.
For a bit of perspective: The Raleigh-Durham-Chapel Hill area has about $1.2 billion in apartments change hands in a typical year, Cotton said.
