New deals add to robust year in apartment sales

At least four local apartment complexes have sold in the last month, continuing a robust year of buying and selling in the multi-family housing market.  

Through last week, 30 apartment properties had changed hands here this year, said George Tikijian, whose firm, Tikijian Associates, has been involved in many of the transactions, including the four that recently closed.

The number of transactions has more than doubled compared with last year, a spike in deal flow caused by healthy occupancy rates and a combination of ample supply and low borrowing costs.

With the Federal Reserve committing earlier this year to keep interest rates low into 2013, buyers are expediting deals by lining up short-term loans that are replaced with permanent financing at attractive rates after the deals have closed.

“Back in 2009 and 2010, people weren’t willing to borrow short term,” said Tikijian. If there’s a sense rates are going up, buyers want to lock in permanent financing up front, which adds considerably to deal times, he said.

Three of the four recent deals involved properties that had been taken back by lenders. They are:

n Chesapeake Landing, at West 38th Street and Interstate 465. The 478-unit property was sold by the lender, GE Capital, and receiver, Buckingham Cos., to New York-based Embassy Group Nov. 17. Built in 1974, it’s being renamed Astoria Park Apartments and is undergoing a $3 million renovation, including new windows, doors, roofing and parking lots. Locally based Barrett & Stokely is managing the property. The complex, which is 60 percent occupied, last changed hands in 2007.

n Orchard Apartments at East 56th Street and I-465, a 378-unit complex also purchased by Embassy Group. The deal closed Nov. 30. The seller was San Francisco-based Helios AMC, a servicer of troubled loans. Embassy Group, which jumped into the fray Nov. 18 when another deal fell through, completed the purchase in less than two weeks. Helios had been involved with the property since Houston-based CNC Communities lost it in 2009. CNC bought Orchard in 2006.

n Cottages at Fall Creek, which is across I-465 from Orchard. The 753-unit complex is another former CNC property that Helios sold on Nov. 30. The buyer, Bluestone Management, represents New York- and New Hampshire-based investors. Helios took title to the property after it was priced at $16.3 million in a September sheriff’s sale. Bluestone is believed to have paid around $20 million for the complex, which was called Brendon Way apartments when it was built in two phases beginning in 1968.

Bluestone also owns the 1,261-unit Lake Castleton apartments at 75th Street and Shadeland Avenue and has relocated its main office there from Ohio.

The fourth recent sale involved Harbour Town apartments on Morse Reservoir in Noblesville. It was sold Dec. 2 to EMK Properties, a Greenwood-based partnership. Harbour Town was sold by Los Angeles-based RPD Catalyst, which bought the property from a lender in 2009. Harbour Town was built in two phases, in 1976 and 1980, and once had more than 200 apartments.

A Chicago-based condominium developer bought the property in 2005 intending to redevelop it as condos. The oldest part of the complex was razed, leaving the 104 apartment units that EMK just purchased. EMK also owns Annaberry Park apartments, a 256-unit across Harcourt Road from St. Vincent hospital.