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Capital Markets Mid-Atlantic Multifamily Northampton APARTMENT HOMES 67 Harry S. Truman Drive | Largo, Maryland 20774 620-Unit Value-Add Opportunity Phase II: 1987 Phase I: 1977
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Page 1: APARTMENT HOMES - DRA Advisors · 2019-11-06 · • 1.2M SF mixed-use development • Medical, retail, and residential space Brand new townhomes marketing north of $400,000 Capital

Capital MarketsMid-Atlantic Multifamily

NorthamptonA PA RT M E N T H O M E S

67 Harry S. Truman Drive | Largo, Maryland 20774620-Unit Value-Add Opportunity

Phase II: 1987

Phase I: 1977

Page 2: APARTMENT HOMES - DRA Advisors · 2019-11-06 · • 1.2M SF mixed-use development • Medical, retail, and residential space Brand new townhomes marketing north of $400,000 Capital

2

NorthamptonA PA RT M E N T H O M E S

THE OPPORTUNITYJLL, as exclusive advisor, is pleased to present Northampton Apartment Homes (“Northampton” or the

“Property”), a 620-unit, garden-style rental community in Largo, Maryland. Situated at the confluence

of the Capital Beltway (I-495) and Central Avenue (Maryland Route 214) and less than one mile from the

Largo Town Center Metro Station, Northampton provides residents with immediate access to the top

employers and retail and lifestyle destinations in both Prince George’s County and Washington, DC.

The Property is well-positioned to benefit from several new developments in the area. The $543 million

University of Maryland Capital Region Medical Center, which is situated just one mile away and is

expected to generate 6,000 new jobs and $800 million in economic activity, is expected to deliver in

Spring 2021. Coinciding with that will be the delivery of Carillon, a new 1.2 million square foot, lifestyle-

oriented mixed-use development. Finally, the area will likely see an influx of price-conscious federal

agencies, nonprofits and associations, and government contractors as a result of rising rental rates in

National Landing – a development that stems from Amazon’s announced arrival.

With the ongoing economic growth in Largo, the Property has demonstrated strong performance -

averaging 3.9 percent effective rent increases over the last 60 days and 5.3 percent net rental income

growth over the past 12 months. A new owner will benefit from outstanding market rent growth while

having the opportunity to renovate 330 classic units and further enhance the 290 units that were

renovated by current ownership.

PROPERTY INFORMATION

Address 67 Harry S. Truman Drive, Largo, MD 20774

County Prince George’s County

Land Area 58.08 acres

Number of Buildings 47 residential, 1 clubhouse, and 1 fitness center

Number of Floors 3 and 4

Year BuiltPhase I: 1977Phase II: 1987

Total Units 620 (Phase I: 344, Phase II: 276)

Total Rentable SF 564,976 SF

Average Unit Size 911 SF

Average Effective Rent Per Unit $1,571

Average Effective Rent Per SF $1.72

Current Occupancy 97.1% (as of August 21, 2019)

Parking ~1,120 surface spaces (1.8 spaces per unit)

Tax Parcels 13-1518224, 13-1518232

Driving Directions

Via I-495 S: Take exit 16 (Arena Drive) and continue on Arena Drive before turning right onto Lotsford Road.

Turn right onto Largo Drive West and then right onto Harry S. Truman Drive until reaching Northampton

on the right.

Via I-495 N: Take exit 16 (Arena Drive) and continue on Arena Drive before turning right onto Lotsford

Road. Turn right onto Largo Drive West and then right onto Harry S. Truman Drive until reaching

Northampton on the right.

Page 3: APARTMENT HOMES - DRA Advisors · 2019-11-06 · • 1.2M SF mixed-use development • Medical, retail, and residential space Brand new townhomes marketing north of $400,000 Capital

3

NorthamptonA PA RT M E N T H O M E S

LARGO PLAZA

LARGO TOWN CENTER

Largo Medical Center

WOODMOORE TOWNE CENTRE

495

202

495

214

LARGO TOWN CENTERMETRO STATION

Carillon Lifestyle Center

University of Maryland Capital Region Medical Center

• Spring 2021 projected delivery date

• Will generate ~$800M in economic activity

• Will support > 6,000 new jobs

• Spring 2021 projected delivery date

• 1.2M SF mixed-use development

• Medical, retail, and residential space

Brand new townhomes marketing north of $400,000

Capital Court Townhomes

Approximately 5,000 daily riders

NorthamptonA PA RT M E N T H O M E S

Page 4: APARTMENT HOMES - DRA Advisors · 2019-11-06 · • 1.2M SF mixed-use development • Medical, retail, and residential space Brand new townhomes marketing north of $400,000 Capital

4

NorthamptonA PA RT M E N T H O M E S

IN V ESTMENT DRIV ERS

SIGNIFICANT VALUE-ADD POTENTIALCurrent ownership implemented a modest value-add renovation

program at Northampton that targeted 290 apartment homes

of varying unit types. In addition to upgrading the baths in each,

current ownership also applied two-tone paint in the living rooms and

installed new black appliances (including microwaves), contemporary

cabinetry, Formica countertops, backsplashes, new vinyl flooring, and

updated lighting in the kitchens. A buyer will have the opportunity

to continue repositioning the asset in the market by renovating the

remaining 330 classic units to achieve tremendous returns. Moreover,

a buyer could further enhance the renovated units with backsplashes

(only 36 of the 290 renovated units currently feature them) to achieve

additional premiums.

SUBSTANTIAL CLASS A RENT SPREADSThe monthly rent differential between renovated apartment

homes at the Property and neighboring Class A product is

significant, as renovated units at Northampton are marketing

for approximately $350 less on average. A unit type breakdown

reveals that the rent spread ranges from $160 to $270 for one-

and two-bedroom units, but it is most pronounced among three-

bedroom units, as renovated three-bedroom apartment homes

at Northampton are marketing for roughly $630 less than those

at the newer multifamily assets. Not only do these immense

spreads illustrate the excellent value of the Property’s apartment

homes when compared to those offered at newer product in the

submarket, but they also indicate that new ownership would be

successful in aggressively growing rents, should a comprehensive

value-add renovation program be pursued.

$1,503

$1,884

$2,282

$1,664

$2,152

$2,911

$0

$1,000

$2,000

$3,000

One Bedroom Two Bedroom Three Bedroom

Ave

rage

Mon

thly

Ren

t

Rent Spread Comparison

Northampton Renovated Units Class A Product

CLASSIC (TRADITIONAL / PHASE I) – 165 UNITS

CLASSIC (CONTEMPORARY / PHASE II) – 165 UNITS

TYPICAL RENOVATION – 290 UNITS

Page 5: APARTMENT HOMES - DRA Advisors · 2019-11-06 · • 1.2M SF mixed-use development • Medical, retail, and residential space Brand new townhomes marketing north of $400,000 Capital

5

NorthamptonA PA RT M E N T H O M E S

DEMONSTRATED RENT GROWTH

INSTITUTIONALLY MAINTAINED COMMUNITYCurrent ownership has spent more than $6 million in capital

expenditures at Northampton over its hold period. Notable

improvements include:

• Clubhouse and leasing office renovation

• New fitness center and outdoor fitness stations

• New playground and dog park

• Pool renovation with new outdoor kitchen and pergola

• New pool furniture with cabanas

• Roof replacement

• Hallway upgrades

• Window replacements (Phase I)

LIMITED NEW SUPPLYUnlike other submarkets of the Washington, DC region, the Largo

area has maintained a relatively limited multifamily supply pipeline

despite several exciting new projects – such as the University of

Maryland Capital Region Medical Center and Carillon Lifestyle Center

– that will ultimately stimulate local economic activity. Only one new

apartment community, which will consist of roughly 350 units, is

expected to deliver within the next 36 months and it will not compete

with Northampton, as it will cater to a more discerning resident base.

New ownership has the opportunity to capitalize on the strong rent

growth trends at Northampton. Coupled with the rising home prices

and economic activity in the submarket, rents at the Property are

excepted to continue to increase.

Over the last 60 days or 49 past leases, the average effective rent

increased 3.9% over the prior lease.

$1,529

$1,588

$1,490

$1,500

$1,510

$1,520

$1,530

$1,540

$1,550

$1,560

$1,570

$1,580

$1,590

$1,600

Avg. Prior Effective Rent Avg. Current Effective Rent

Effective Rent Growth - Last 60 Days

$1,405

$1,479

$1,360

$1,380

$1,400

$1,420

$1,440

$1,460

$1,480

$1,500

Aug 2018 Jul 2019

Net

Ren

tal I

ncom

e (P

er U

nit)

Net Rental Income Growth

Effe

ctiv

e R

ent

As a reflection of heightened demand in the submarket, net rental

income at the Property has been consistently increasing, averaging a

6.3% increase between August 2017 and July 2018 and a 5.3% increase

between August 2018 and July 2019.

$1,529

$1,588

$1,490

$1,500

$1,510

$1,520

$1,530

$1,540

$1,550

$1,560

$1,570

$1,580

$1,590

$1,600

Avg. Prior Effective Rent Avg. Current Effective Rent

Effective Rent Growth - Last 60 Days

$1,405

$1,479

$1,360

$1,380

$1,400

$1,420

$1,440

$1,460

$1,480

$1,500

Aug 2018 Jul 2019

Net

Ren

tal I

ncom

e (P

er U

nit)

Net Rental Income Growth

Effe

ctiv

e R

ent

3.9%Growth

5.3%Growth

Page 6: APARTMENT HOMES - DRA Advisors · 2019-11-06 · • 1.2M SF mixed-use development • Medical, retail, and residential space Brand new townhomes marketing north of $400,000 Capital

6

NorthamptonA PA RT M E N T H O M E S

THE AMAZON EFFECTAfter more than a decade of stagnant office rental rates in National

Landing, Amazon’s announced arrival has increased rents by 25

percent in a matter of months, with further increases expected. As

a result, for the first time, National Landing’s current tenant mix of

federal agencies, nonprofits and associations, and government

contractors will find it increasingly challenging to remain. Today,

these three price-conscious sectors represent 96 percent of National

Landing’s occupancy, with a significant pipeline of expirations

ahead. From 2021 to 2025, 3.9 million square feet of leases will expire

across these sectors, and with rents continuing to climb, suburban

submarkets outside of National Landing but still within and near

the Beltway will see a significant uptick in demand, not just from

employers, but also from their employees, many of whom will face

challenges as residential rents in National Landing climb.

Potential relocation options for National Landing employers include

not only close-in suburban sites in both Arlington and Alexandria,

but locations such as Landover, Suitland, Hyattsville, and Largo

in Prince George’s County as well. All of these submarkets feature

high direct vacancy rates and lower average asking rents when

compared to the National Landing submarket and will thus be

viewed favorably by price-conscious tenants. Should there be an

influx of new employers to these submarkets, Northampton would

benefit greatly as it is centrally located between each of them.

25%National Landing Office Rents have Increased by 25%

3.9MM SFOffice Leases

Expiring in National Landing

PERFECTLY POSITIONED

Prince George’s County Perfectly

Positioned for Relocating Tenants

Page 7: APARTMENT HOMES - DRA Advisors · 2019-11-06 · • 1.2M SF mixed-use development • Medical, retail, and residential space Brand new townhomes marketing north of $400,000 Capital

7

NorthamptonA PA RT M E N T H O M E S

FEDERAL GOVERNMENT

United States Department of Defense

United States Environmental Protection Agency

United States Transportation Security Administration

United States Department of Labor

United States Customs & Border Protection

United States Army

United States Drug Enforcement Agency

United States Air Force

United States Agency for International Development

United States Smithsonian Institution

GOVERNMENT CONTRACTOR

Lockheed Martin

RAND Corporation

Raytheon Company

Management Systems International

Bell Helicopter

Decisive Analytics Corporation

Gibbs & Cox

General Dynamics Information Technology, Inc.

Aerospace Corporation

Advanced Concepts & Technologies

NONPROFIT/ASSOCIATION

Winrock International

International Justice Mission

American Systems Corporation

Communities in Schools

Year Up

Counterpart International Inc

American Electronics Association

Industry Data Exchange Association

American Association for Homecare

American Foundation for the Blind

1

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9

10

1

2

3

4

5

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7

8

9

10

1

2

3

4

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7

8

9

10

1

2

3 4

5

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3

4

5

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7

8

9

10

1

2

3

4

5

6

7

8

9

10

1

Airport Access Road

National Landing

17.2%Direct Vacancy

$43.97 FSAvg. Asking Rent

Page 8: APARTMENT HOMES - DRA Advisors · 2019-11-06 · • 1.2M SF mixed-use development • Medical, retail, and residential space Brand new townhomes marketing north of $400,000 Capital

8

NorthamptonA PA RT M E N T H O M E S

UNIVERSITY OF MARYLAND CAPITAL REGION MEDICAL CENTER In November 2017, County and State officials broke ground on the new

University of Maryland Capital Region Medical Center, a state-of-the-art

medical complex that is projected to deliver in March 2021. The 600,000

square foot complex, which is being constructed adjacent to the Largo

Town Center Metro Station and just one mile from Northampton, will feature

an 11-level main patient care tower, two rooftop helipads, 205 private

inpatient rooms, a 20-bed short stay treatment area, a 45-bay emergency

department, eight operating rooms, and a 15-bed specialty pediatric

hospital. At completion, the $543 million project will generate nearly $800

million in economic activity and support more than 6,000 jobs according to

The Battelle Technology Partnership Practice.

MARCH 2021Delivery Date

$800MMFuture Economic

Activity

6,000New Jobs

Page 9: APARTMENT HOMES - DRA Advisors · 2019-11-06 · • 1.2M SF mixed-use development • Medical, retail, and residential space Brand new townhomes marketing north of $400,000 Capital

9

NorthamptonA PA RT M E N T H O M E S

CARILLON LIFESTYLE CENTER Coinciding with the Spring 2021 opening of the University of

Maryland Capital Region Medical Center will be the delivery of

Carillon, a new 1.2 million square foot, lifestyle-oriented mixed-use

development. The first phase of the project, which will be built on

the site of the former Boulevard at Capital Centre shopping center,

will feature a medical office building, two retail buildings, a 350-unit

residential complex, and a one-acre public park. Also included in

Carillon’s plans are an AMC IMAX movie theater and a standalone

restaurant building facing the park. Not only will Carillon stimulate

the local economy through new jobs and increased investment,

but it will also afford residents of Northampton access to a host of

exciting new retail and lifestyle amenities.

1.2 MM SFMixed-Use

Development

NEW RETAILExciting New

Retail and Lifestyle Amenities

6,000New jobs and

Increased Investment

Page 10: APARTMENT HOMES - DRA Advisors · 2019-11-06 · • 1.2M SF mixed-use development • Medical, retail, and residential space Brand new townhomes marketing north of $400,000 Capital

FOR FINANCING:

Although information has been obtained from sources deemed reliable, Owner, Jones Lang LaSalle, and/or their representatives, brokers, or agents make no guarantees as to the accuracy of the information contained herein, and offer Northampton Apartment Homes without express or implied warranties of any kind. Northampton Apartment Homes may be withdrawn without notice. If the recipient of this information has signed a confidentiality agreement regarding this matter, this information is subject to the terms of that agreement. ©2019. Jones Lang LaSalle. All rights reserved.

Anthony HebenstreitVice President

+1 703 891 8416 [email protected]

Shawn McDonald Managing Director

+1 703 891 8425 [email protected]

Robert GarrishManaging Director

+1 202 719 [email protected]

Christine EspenshadeManaging Director

+1 202 719 [email protected]

Greg BurySenior Analyst

+1 202 719 [email protected]

Catherine ChengSenior Analyst

+1 202 719 [email protected]


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