Dive Brief:
- Silver Spring, Maryland-based HH Fund bought Ranger Properties’ 110-unit project in the Union Market neighborhood of Washington, D.C., for $38.3 million at a foreclosure auction on May 23, according to Bisnow.
- Srinivas Chavali, who bought The Lanes at Union Market’s note from lender Eagle Capital in January, took the property to auction at Alex Cooper Auctioneers. The $33.7 million construction loan, made by Eagle in 2019, increased to $39.5 million in 2020 and came due in 2023, according to Bisnow.
- HH Fund, founded in 2015, is focused on the investment and management of student housing, according to its website. The Lanes at Union Market was not advertised as a student housing project, although HH Fund and brokerage firm CBRE didn’t respond to Multifamily Dive’s request for comment. The firm owns 7,000 beds across 15 properties in seven different states, according to its website.
Dive Insight:
The apartments at The Lanes at Union Market were 89% leased as of March 31, though a 2,327-square-foot, first-floor commercial unit sat vacant, according to the Alex Cooper listing. A UPS store occupies another 1,134-square-foot commercial unit under a 10-year lease that it signed on Nov. 16, 2022. The property generated $1 million of net operating income for the six-month period ending March 31, 2024.
Ranger Properties purchased the land for The Lanes at Union Market in 2017 but wasn’t able to start construction until 2020, Chavali told Bisnow. Ranger didn’t reply to Multifamily Dive’s request for comment.
The project included 50 one-bedroom, one-bathroom units and 60 two-bedroom, two-bathroom units, ranging in size from 534 to 945 square feet. As of March 31, 103 apartments were leased, and gross monthly rentals generated approximately $268,000, according to the listing.
The units include stainless steel appliances, white cabinetry, white quartz countertops, vinyl hardwood plank flooring and walk-in closets, according to the listing. The property’s amenities include a fitness room, game room, multi-use room, lounge and roof terrace.
The property sits near Union Market, which has a diverse array of shops, boutiques and vendors in one of the most active submarkets for development in the nation’s capital. But developments in the neighborhood, including the 13-story, 99-unit Tribeca NoMa project, are facing stress.
In the city’s 20002 and 20003 ZIP codes, which encompass high-growth neighborhoods like NoMa and the H Street Corridor, 7,378 new apartments were added between 2018 and 2022, according to RentCafe. Another 3,000 units are expected to come online over the next three years, according to Delta Associates, an Alexandria, Virginia-based research firm that covers the mid-Atlantic region.
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