MH Feeding frenzy
While private investors accounted for 82 percent of the dollar value of nation-wide apartment acquisitions last year, institutions and REITS were among the nation's most active sellers, participating in nearly half of all dispositions over $5 million.
"With their stocks battered over the past several years, REITs could sell a building for a lot less on a yield basis then what they could turn around and buy their own stock for. They could sell an older or under-performing asset for a 6.5 percent yield and, if their stock was yielding 7.5 or eight percent, turn around and buy it back. It was a bottom line financial play for them," said Stanford Jones, executive VP of investments at Marcus & Millichap Real Estate Investment Services, who represented AvalonBay Communities and Equity Residential in two separate sales in the San Francisco metro in Q3 2009.
Equity Residential last October sold the 26-year-old, 492-unit Lakeville Resort at Petaluma for $52 million, or $105,691 per unit, to Abacus Capital Group, a New York City-based firm that owns about 23,000 apartment units across the U.S. for institutional investors. It was the largest sale in Sonoma County, Calif., last year. Abacus financed the transaction with a seven-year, fixed-rate loan with Freddie Mac, placed by Holiday Fenoglio Fowler Senior Managing Director Mona Carlton, and renamed the property Enclave at Adobe Creek.
Located in Petaluma approximately 33 miles north of San Francisco with convenient access to Redwood Highway, the community that was
