WASHINGTON, September 13th, 2022 – Marcus & Millichap (NYSE: MMI), a leading commercial real estate brokerage firm specializing in investment sales, financing, research, and advisory services, announced today the sale of Chestnut Oaks, 108 condominium units in a 149-unit market-rate seniors housing (55+) condominium community located at 1800 Palmer Road in the Fort Washington submarket of Prince George’s County, Maryland. The 108 condominium units sold for a combined purchase price of $15.5 million, or $143,519 per unit at a 4.33% cap rate based on trailing-12 (T-12) month financials.
Chestnut Oaks is a serene, suburban, tree-lined community just 0.7 miles east of Indian Head Highway and five miles south of Washington, DC. The property features numerous community amenities, including a billiards room, a 165-space parking lot with valet service, three elevators, a movie theater, a gym, a beauty salon, a library, a resident lounge with a full kitchen and dining area, outdoor gazebo and garden with grills, and many additional smaller common area spaces. Additionally, each condo unit is in excellent condition with all-electric kitchens, a dishwasher, garbage disposal, an individual washer & dryer, and individually controlled air conditioning and heating.
The seller, Martin Poretsky, was the original developer and completed the project during the financial crisis of 2008, which impacted condo out sale efforts. In response, the developer strategically retained 105 of the 149 condo units, which allowed them to operate the property as a 55+ age-restricted rental community. In recent years, the developer re-acquired three units under a separate entity, LOML LLC, bringing their total number of units owned to 108.
Marty Zupancic said, “Our team is pleased with the results in the successful closing of this complex multifamily transaction in Prince Georges County, MD. The closing of this asset represents the disposition of the final piece of a significant multifamily portfolio that our client built over many years. We are proud to have collaborated with Mr. Poretsky and his team to help him accomplish his real estate investment goals.”
Christian Barreiro added, “We are excited to have been able to navigate the many complexities of the deal including the condominium interest component, a defeasance process, and the changing interest rate environment mid-transaction. We are pleased that an out-of-market buyer will be able to receive the baton and further the legacy of the Seller, who originally built the property.”
Zupancic, in addition to Christian Barreiro, Nick Murray, and Eric Jentoft-Herr, represented the seller in the transaction. The buyer was also secured by the firm and represented by Sean Brown.
“Fort Washington in Prince George’s County is a highly desirable submarket that has seen tremendous growth in recent years. The area is anchored by National Harbor, a $3.4+ billion entertainment destination located on the Potomac River and home to approximately 24,000 residents with a high average household income of $156,921,” says Eric Jentoft-Herr. “Almost 30% of the local population is between 40 and 60 years old, bordering eligibility for senior living. There are only six other properties within a ten-mile radius providing market-rate senior housing, and four of them supply both market-rate and affordable units, showcasing a clear lack of supply in the PG County submarket. Given the rapid expansion of the senior population and historically high life expectancies, the projected demand for market-rate senior housing projects coupled with a lack of existing supply will support strong rent growth well into the future.”
Read More at Commercial Observer and CityBiz.
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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.