TRECAP, Fairfield Buy $26M Apartment Asset

April 18, 2011
By Barbra Murray, Contributing Editor

TRECAP Partners L.L.C. and Fairfield Residential Co., both of which are in the midst of shopping sprees, recently joined forces to buy River Pointe at Den Rock Park Apartments, a 174-unit apartment community in Lawrence, Mass., approximately 25 miles north of Boston. The joint venture partners acquired the asset from Equity Residential.

River Pointe sprouted up on seven acres at 333 Winthrop Ave., a site providing immediate access to the 120-acre Den Rock Park woodland preserve, in 2000. The garden-style community encompasses six two- and three-story residential structures, a single-story clubhouse and four single-story detached parking facilities.

Cushman & Wakefield Capital Markets Group marketed the property on behalf of Equity Residential. River Pointe’s attributes dovetail perfectly with TRECAP’s and Fairfield’s respective acquisition strategies. “TRECAP targets multifamily investments in strong business growth markets around the nation’s important gateway cities like Boston,” Michael McNamara, managing director and head of acquisitions for TRECAP, said. “We see the opportunity to take advantage of rents and occupancies growing ahead of national trends in a suburban market which offers excellent access to employers and retailers as well as mass transportation alternatives to commuting into the heart of the city.”

River Pointe is surrounded by a host of leading employers–including biotech firms like Alcatel-Lucent and Pfizer and high-tech concerns such as Hewlett-Packard and Nortel Networks–and with a location two miles from the MBTA train station in downtown Andover, it offers a convenient commute to any number of companies in Boston.

Indeed, the rents and occupancy levels are at an enviable level in the area and are still on the upswing. An anticipated 3 percent growth in the professional services, education and health sectors in metropolitan Boston this year will spur employment growth, which is expected to increase demand for rental housing, according to a report by Marcus & Millichap Real Estate Investment Services. Conditions will likely push the average apartment vacancy rate down to the low 3 percent range in the city and below the 6 percent mark in the suburbs.

“It serves our strategy of buying in high barrier to entry markets,” Bill Revers, eastern region senior acquisition officer with Fairfield, noted of the River Pointe acquisition. Over the last six months, Fairfield has shelled out in excess of $120 million to buy multifamily assets in its target markets and has created a development pipeline totaling over $620 million in locations fitting the company’s criteria across the U.S.

TRECAP has been active on the acquisition scene, too. In a joint venture with Bell Partners earlier this month, the real estate investment management and advisory services provider purchased a majority interest in a 284-unit apartment complex in Raleigh, N.C., for $27 million, and in January, the company teamed with Holland Partners to purchase a majority stake in a mixed-use residential property in downtown Portland for $37.5 million. In 2011, TRECAP expects to surpass the $250 million of multifamily transactions it closed last year.