Connecticut’s apartment market has reached a “level of parity” that’s beneficial to both buyers and sellers, according to one industry source. The Newbury Village Apartment Homes in Meriden, above, commanded a sale price of $30.25 million earlier this month.
For the first time in a while, it’s good to be both a buyer and a seller in Connecticut’s apartment market.
“We have a level of parity I don’t recall seeing in this industry for years,” said Steve Witten, a broker with New Haven-based Marcus & Millichap. Witten and his partner, Victor Nolletti, earlier this month brokered the sale of a Meriden apartment complex for a precedent-setting $30.25 million.
The newly constructed Newbury Village Apartment Homes were purchased by Westchester County, N.Y.-based real estate investment company Rabin/Alexander LLC. The 180-unit apartment community was sold at 96 percent occupancy.
“There is no finer apartment building in the state of Connecticut,” Witten said.
The sale represented a good deal for both the buyer and the seller, Newbury Village Development.
“It is precedent-setting in the sense that there has been no property in New Haven County that has sold anywhere near to that price,” Witten said. So the seller got a premium price, he explained, but the buyer also got a good deal.
“The yield outpaces almost anything else an investor can purchase,” he said. Those facts, and the expectation that interest rates will stay relatively low through the end of this year, make today’s investment market different from the norm, Witten said.
“[The stable interest rate] means the market remains very attractive for both buyers and sellers, which is very unique,” he said, because sellers get a premium price and buyers get a very strong yield.
A Solid Market
Some parts of the state are starting to garner the attention of experts in Connecticut’s apartment industry. Many look at Hartford’s market with anticipation. Despite the capital’s strong growth, it still has a way to go, according to Witten. Some of the high-end property that has come to market has been slow to rent, but he said he still expects to see between 6 percent and 8 percent in rental growth.
By contrast, New Haven already has become an effective 24/7 city and has a solid market anchored by Yale University. In all likelihood, that city also will see between 6 percent and 8 percent rental growth in 2007, Witten said.
In addition, he noted, some suburban communities outside of New Haven and Hartford will see healthy rental growth this year.
The Newbury Village Apartment Homes, which were sold for $168,056 per unit or $171 per square foot, were completed in 2006. The community is a Class A luxury apartment community, and houses residents who work in Greater New Haven and southeastern Hartford County.
Located at 211 Pomeroy Ave. in Meriden, Newbury Village’s 180 units are housed in two 4-story mid-rise structures and two 2-story big-house-style buildings on 10.38 acres.
The unit mix is comprised of 16 floor plans that include 16 studios with 658 square feet of living space each, 64 one-bedroom units with between 735 square feet and 863 square feet of space, and 100 two-bedroom units with 1,130 square feet to 1,319 square feet. Penthouse units feature upgraded fixtures, appliances and finishes, and there are private garages for up to 53 units. All units have full-sized washers and dryers, 9-foot vaulted ceilings, oversized walk-in closets, large eat-in kitchens and energy-efficient mechanical systems. Community amenities include a 5,200-square-foot clubhouse with a fitness, business and leasing center; a resort-style swimming pool with a sun deck; private patios and balconies; garages; and abundant parking. The buildings all have sprinkler systems.
The seller, Newbury Village Development, was represented in the transaction by its in-house counsel, David Goldban and Charles Rubenstein, and the buyer, Rabin/Alexander, was represented by Samuel Silverman of the Silverman Law Firm.
Witten and Nolletti also recently closed 151 units in New Britain for $7.38 million, 120 units in East Haven for $10.2 million, 510 units in Manchester for $39 million and 300 units in New Britain for $13.35 million.
