Harbor Group International Concludes Biggest D.C.-Area House Offer This Year

For 2 weeks, the sale of the Ballston Place apartment complex in Arlington, Virginia, stood as the biggest multifamily transaction in the Washington, D.C., market in 2018. Its brief reign just ended.

Harbor Group International, a realty management and financial investment firm locateded in Norfolk, Virginia, finished Thursday its previously revealed purchase of Dulles Greene, a sprawling 806-unit apartment building in Washington’s Virginia suburban areas, in a $193 million deal. The sale price eclipses the $169 million Akelius paid for Ballston Place earlier this month.

Both sales highlight the head-scratching staying power of the Washington rental market. Greater D.C. was one of the first house markets to roar from the Great Recession, with increasing leas, strong occupancy and wild financier interest. And it has remained constantly strong when other hot markets are revealing signs of being post-peak.

Strong job development, specifically for high-paying tasks, and falling own a home rates fueled the rental market’s initial recovery in Washington. However when designers reacted with a flood of new homes – some 51,000 new systems were brought to market in between 2014 and 2017 – the marketplace kept absorbing them. Greater Washington has actually seen the third-most brand-new homes brought online this cycle, behind only the massive New York City market and Dallas.

Vacancy now stands at 5.9 percent in the Washington market, according to CoStar information, simply above the 5.7 percent national average. Lease development slowed to a negligible.7 percent in 2017. But all that might be short-term, if current history is a guide.

While the total dollar rate is a year-to-date high, the per-unit rate of about $239,000 per home for Dulles Greene is more in line with other slightly older leasings in the location. Of D.C.-area apartment homes costing more than $50 million this year, three have traded for north of $500,000 per system.

The Ellington, a 190-unit tower at 1301 U St. NW, in the District, offered to the U.S. arm of German investor Jamestown for $118.6 million in March, or a whopping $624,000 per system. That is this year’s high-water mark.

The list price for Dulles Greene represents a healthy cap rate of 5.28 percent for Harbor Group International, which was reported to be the buyer previously this month.

The 20-year-old, garden-style complex at 2150 Astoria Circle in Herndon is 94 percent rented. Homes at Dulles Green variety from one- to three-bedroom units, and function vaulted ceilings, washer and dryers, and fireplaces. The features at the home include a pool, locals lounge with grilling stations, a play area and gym and tennis courts.

Jones Lang LaSalle’s brokerage group led by Christine Espenshade and Robert Garrish represented the seller, Toll Sibling, of Horsham, Pennsylvania.

For more details on the sale of Dulles Greene, please see CoStar Comp # 4493276.

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