Three apartment complexes in Portland and Scarborough have been sold to a Massachusetts real estate company that seeks to profit from low interest rates available to buy multi-family housing units and rising rents in the Portland area.
The 309-unit deal sold at $50.25 million, resulting in an average of $162,600 per unit.
The three properties are Tamarlane Apartments, 115 units in the Back Cove neighborhood of Portland; Foxcroft Apartments, 104 townhouses located off Route 1 in Scarborough; and Coach Lantern Apartments, 90 townhouses off Winnocks Neck Road in Scarborough.
Philadelphia-based Resource Real Estate sold the properties to Chestnut Realty Management, based in Springfield, Massachusetts, according to a news release from CBRE | The Boulos Co. and CBRE | New England.
The sale, which closed on Dec. 2, shows that multi-family housing in the Portland area is a safe investment because interest rates to purchase rental units remain low and rents are being driven upward because of strong demand, said Joe Porta, a partner at CBRE |The Boulos Co. He said the revenue is the safest and the debt is the least expensive among real estate investments.
“Greater Portland’s apartment rental market is consistent and thriving,” Porta said. “That stability and growth produces high prices when paired with great financing.”
He said Portland is following the national trend in this regard, with investors prioritizing opportunities in the multi-family sector.
Resource Real Estate, which bought the properties in 2007, made money on the deal. At the same time, the properties offer the new owner a “tremendous upside,” said Biria St. John, vice chairman at CB Richard Ellis, a broker in the deal.
“The market in Portland is very tight for housing with no meaningful new supply,” he said in a statement.
Porta, who worked on the deal for more than two years, said the sale was the biggest for residential properties in Maine in recent history.
He said tenants in the units are unlikely to see their rents go up as a result of the sale because their rents currently are at market rate.
The area has seen an explosion in rental costs that has created a scramble for affordable housing among renters. The average rent for a two-bedroom apartment in Portland – about $1,560 – has risen 40 percent in the past five years, according to an analysis done by the Portland Press Herald.
Chestnut Realty Management owns a number of commercial and residential properties in New England. Its portfolio consists of three other multi-family housing properties in Massachusetts and Connecticut, according to its website.
Tom Bell can be contacted at 791-6369 or at:
tbell@pressherald.com
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