01/11/2012

CBRE Fund Shopping Luxury DC Apartments

CBRE Global Investors is looking to take advantage of Washington’s booming apartment market by selling a luxury complex it acquired two years ago.

The 371-unit property, at 300 Massachusetts Avenue NW, is likely to attract bids of at least $160 million, or $431,000/unit. At that price, the buyer’s initial annual yield would be about 4.25%. The two-tower complex, called Mass Court, is listed with CBRE’s brokerage affiliate.

The investment manager stands to turn a hefty profit. Its $1.3 billion CBRE Strategic Partners Value 5 fund acquired the high-rise from Prudential Real Estate Investors for $105.5 million, or $284,000/unit. The transaction closed in February 2010, just as the multi-family market began to recover from the downturn.

Apartment specialists will be watching the offering carefully. Strong demand for relatively new Class-A properties like Mass Court made the Washington area the nation’s most-desirable apartment market last year. Prices were driven up to boom-era levels, with some deals carrying skimpy sub-4% capitalization rates. Some multi-family investors question whether the sky-high prices will hold. As the first luxury listing for 2012, Mass Court will indicate whether the area’s multi-family boom continues in the New Year.

The complex, which was built in 2004, is about 97% occupied. It consists of attached towers of 14 and nine stories. Units feature granite countertops, walk-in closets, Italian-tile foyers and washer/dryers. Property amenities include a heated rooftop pool and a fitness center with a yoga studio.

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