On Monday, New York City-based U.S. real estate investment manager CP Capital announced the sale of Hathon – a 190-unit apartment community in Medway, Massachusetts, a suburb of Boston — in a news release shared exclusively with Multifamily Dive.
The property, built in 2023 by Fort Washington, Pennsylvania-based developer Toll Brothers Apartment Living, is positioned between Boston and Providence, Rhode Island, and offers easy access to the Interstate 495 corridor. It includes 142 market-rate and 48 affordable units in four- and five-story wood-frame buildings.
Amenities include a state-of-the-art fitness center, a resort-style pool, co-working spaces, a club room with a double-sided fireplace, a game room and bar area, a demonstration kitchen, a playground, a pet spa and a dog run.
Hathon sold to an unnamed all-cash buyer after generating offers from both private and institutional capital, highlighting the demand in the Boston multifamily market, according to Jay Remillard, co-head at CP Capital.
Remillard told Multifamily Dive that the firm saw interest from core and core-plus bidders.
“It was the best bid sheet in the country,” Remillard said. “Everybody who we wanted to show up showed up.”
However, the 10-year Treasury jumped 50 basis points during the process, limiting the purchasing power of buyers using leverage.
“People out there who have that core money right now can scoop up almost every deal and get outsized returns,” Remillard said.
Different buyer pool
While the Hathon sale process showed the strength of the Boston market, CP Capital faced an entirely different buyer pool when it sold The Gabriel, a 312-unit wrap-style property in the Los Angeles suburb of Pomona, California, in October.
“The Boston submarket has done so well over the last couple of years,” Remillard said. “It's really the opposite of that Los Angeles County profile, where you're not seeing a lot of new supply, but you're seeing this population decrease, and there's always that looming threat of rent control.”
The Gabriel, completed in 2022, was 94% leased when sold for an undisclosed amount to an unnamed buyer. The property offers interiors with smart home technology, stainless-steel appliances, quartz countertops, luxury plank flooring, Wi-Fi thermostats, community video intercoms, keyless entry in common areas and virtual keys. Amenities include a pool and spa, fitness center, on-site retail, four park-like courtyards with fruit trees and outdoor seating, firepits, a dog park and pet wash, club room, rideshare lounge, entertainment lounge, outdoor grills, 24-hour package lockers and covered bike storage.
Despite those high-end features, CP Capital mainly saw value-add bidders for The Gabriel, despite its similarities to Hathon.
“This is a market where buyers were underwriting 0% to 1% rent growth,” Remillard said. “They were underwriting continued concessions. So, a lot of people actually had the value of the property going down in the first 18 months. So it was a very interesting case.”
Still, the good news for sellers is that buyers are returning to the market around the county. However, they’re not willing to get aggressive on pricing.
“For the longest time, we were hitting or exceeding stretch pricing,” Remillard said. “The way that we've seen things play out recently is that groups are looking for a deal in a very specific box, but they're not willing to stretch.”
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