AREA Property Partners Takes 1,180-Unit Virginia Apartment Complex

February 29, 2012
By Nicholas Ziegler, News Editor

AREA Property Partners, after targeting the Alexandria, Va., area late last year for apartment buys, is back in the area. The firm has purchased the city’s EOS 21, a 1,180-unit community, for an undisclosed price. AREA has selected ROSS Management Services, an affiliate of the ROSS Cos., to manage the property.

James Simmons III, a partner with AREA, called the community “an attractive opportunity to invest in a well-located property with excellent proximity to the Van Dorn Metro and to provide high-quality workforce housing in one of Washington, D.C.’s strongest submarkets for multifamily housing.”

EOS is amenity-rich, featuring an on-site daycare center and convenience store amid its studio, one- and two-bed residences. AREA plans a slate of improvements that will include both common-area and in-unit renovations.

According to the 2012 annual report by Marcus & Millichap Real Estate Services Inc., the D.C. metro area will see renter demand “grow faster than apartment stock in 2012, as job creation and a large population of recent college graduates form new households. In addition, tighter residential mortgage requirements will compel many residents to delay home purchases, leaving rentals as the only realistic housing option in desirable areas.”

The report also noted that cap rates for Class A properties will likely hover around 5 percent for the year, while performing Class B properties will trade around the 6 percent mark.

In September of last year, AREA was busy with two significant buys. The first was a $40.9 million, 244-unit pickup of the Heritage at Old Town in Alexandria, which was also set to be managed by ROSS. Just a day later, the company underwent a joint venture with McDowell Properties to acquire a portfolio of defaulted loans – secured by 17 apartment properties with an aggregate 4,733 residences – for $215 million.