RIDGES OF CASCADE APARTMENTS
237
units
$240,506
price per unit
5.81%
cap rate
Their team and approach attracted a variety of investor types from across the country. NAI brought us an offer that surpassed any previous sale price per unit for sale for suburban apartment communities in Michigan. We were extremely pleased by their performance.
-Chad Cassiday
Action
The NAI Multifamily Team utilized its extensive data base of over 3,000 investor groups, extending from coast-to-coast. That effort generated interest from, and competition between, institutional buyers from across the nation, as well as some foreign investors. The marketing process yielded numerous offers. The property tax concern was addressed by arranging a meeting between the buyer with the best offer, the local property tax assessor and NAI’s tax appeals expert. An understanding was reached between the buyer and assessor that helped to significantly alleviate buyer concerns regarding a property tax increase in the year after a sale. In addition, the NAI team convinced the seller to investigate green certification for the property. This saved 25 basis points for the buyer on its Freddie Mac mortgage; a very significant savings given the substantial loan size.
Challenge
The NAI Wisinski of West Michigan Multifamily Team was retained on an exclusive basis to market an exceptional, 237 unit, luxury apartment community. As a brand new Class A product with very little competition and high barriers to other new competing product, the property experienced very strong preleasing and was 100% occupied throughout the marketing period. Since the asset represented the top of the market, there was no available sales comparable data to support pricing. The property was justifiably worth much more than replacement cost. In addition, the property was performing significantly stronger than initially expected, which raised a significant buyer concern regarding potential property tax uncapping toward purchase price.
Result
The property sold at the highest price per unit ever recorded in Michigan for a suburban, market rate asset. A very well capitalized private equity group purchased the property as a long term hold. The property represented an opportunity to add an extremely high quality asset to the buyer’s portfolio, while entering a strong market segment that has limited competition and very high barriers to entry. Both the buyer and seller were happy with the result.
Full Testimonial
We developed a 237 unit, true Class “A” suburban apartment community in a very strong demographic area of Grand Rapids, MI. We developed the project as a long term hold, but shortly after completion, the property was fully stabilized and the NAI Team of Craig Black, Scott Nurski and Jamey Casey produced a Broker Opinion of Value along with top-quality marketing materials, convincing us that we should evaluate the proposed valuation.
Their team and approach attracted a variety of investor types from across the country. NAI brought us an offer that surpassed any previous sale price per unit for sale for suburban apartment communities in Michigan. We were extremely pleased by their performance.
-Chad Cassiday