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Marcus & Millichap has announced today the sale of Sky Properties, a 67-unit multifamily portfolio located in Silver Spring and Takoma Park, according to Brian Hosey, regional manager of the firm’s Washington, D.C. office.
Multifamily Investment Specialists Marty Zupancic, Eric Jentoft-Herr, Christian Barreiro, and Dennis Cravedi brokered the transaction. The 67 unit, 12-building portfolio contains a diverse unit mix of four efficiencies, 34 one-bedrooms, 27 two-bedrooms, and two three-bedrooms. The Zupancic Group sold the portfolio for $10,615,000 with an average price of $158,432 per unit. 8804 Bradford Road set the record price per unit for comparable class C buildings under 100 units at $210,000 per unit based on CoStar transaction data from 1980 onwards. Marcus and Millichap associate Eric Jentoft-Herr said, “The sale price we achieved for the portfolio is the direct result of the Zupancic Group’s extensive marketing process that left no stone unturned and brought all potential buyers to the table. The competition in this process forced buyers to bid aggressively and extracted the highest price from the market.”
The buyer of the portfolio, Deric Tomenko of BTT Management, is one of the more experienced owners in the Silver Spring/Takoma submarket, with over 30 properties under his management and a solid reputation for maintaining his properties and keeping them affordable for his tenants. After closing the transaction, Deric said, “I am happy that I was able to execute on this opportunity to expand my portfolio while successfully negotiating a deal with Montgomery County to preserve affordable housing units. I am very excited to breathe new life into these multifamily assets and reposition them for future growth.”
With demand for housing rising in areas close to the new transit system, preserving affordable units in the Sky Properties Portfolio was an essential objective for Montgomery County. The Zupancic Group’s preemptive marketing strategy allowed our client to take advantage of the increase in rental demand throughout the area and react accordingly despite significant uncertainty in the market. Marty Zupancic, one of the most active multifamily advisors in the D.C. Metro submarket said regarding navigating transactions during recent months, “The market has remained extremely resilient despite the disruptive coronavirus pandemic. We have been amazed at the pricing we have achieved for our clients over the last nine months, with over 25 multifamily transactions closed since the virus hit hard in March. Record low-interest rates and dramatic disruptions in retail and hospitality product types are factors that have contributed to the accelerated migration of capital into the multifamily sector.”
Less than a mile from two future Purple Line stations, the Sky Properties Portfolio sale took advantage of the massive growth stemming from the $2 billion infrastructure project, which aims to revamp Maryland transportation by connecting Montgomery and Prince George’s County. The upcoming 16.2-mile-long light rail will transform travel throughout Montgomery and Prince George’s County, supporting community revitalization and aiming to take 17,000 cars off the road daily by providing a public transportation alternative to the I-495 Beltway. The Sky Properties Portfolio’s location in an opportunity zone, an investment tool established by Congress to encourage investments in historically underserved communities nationwide, provided an excellent opportunity for buyers to invest in a booming community and future transit-oriented location.
Marcus & Millichap is the nation’s largest brokerage firm focused exclusively on investment sales. It is based on a simple premise: matching each property with the largest pool of pre-qualified investors. With over 2,000 investment sales and financing professionals located throughout the United States and Canada, Marcus & Millichap is a leading specialist in commercial real estate investment sales, financing, research, and advisory services. Founded in 1971, the firm closed 8,954 transactions in 2020 with a value of approximately $43 billion. Marcus & Millichap has perfected a powerful system for marketing properties that combines investment specialization, local market expertise, the industry’s most comprehensive research, state-of-the-art technology, and relationships with the largest pool of qualified investors. To learn more about the company, please visit www.MarcusMillichap.com.