Firm buys urban apartment complex for $10.25M
A Michigan firm has purchased an apartment complex in town with more than 100 units.
Lansing-based DTN Management Co. acquired Waters House Apartments in Grand Rapids’ Heritage Hill neighborhood, at 500 Fulton St. E.
The historic property was sold by an unnamed seller for $10.25 million, according to Colliers International West Michigan last week.
Matt Jones, associate vice president of multi-family investments at Colliers International West Michigan, represented both the buyer and the seller in the deal.
“We received a lot of interest in this property, because Grand Rapids is on the national map for investors, and there is limited product available,” Jones said.
“Our extensive marketing process attracted buyers from all over the world, and we believe the property received significant traction because Grand Rapids has continued to make headlines as a great place to live, work and invest.”
The complex received 18 offers, with the majority being from out of state, Jones said.
The property consists of two separate buildings. The first is a 103-unit building that features studio, one, two and three-bedroom floor plans. The second building is the original historic mansion on the property, which has been divided into four 2,000-square-foot units.
John Woods, chief investment officer at DTN Management Co., said the firm plans to invest $2.5 million into interior and exterior renovations at the property to “bring a new element of lifestyle living into the historical Heritage Hill.”
“Waters House is a natural expansion of our portfolio and commitment to the core of Grand Rapids,” Woods said. “This was an opportunity to re-invest into Grand Rapids that aligned with DTN’s standard of providing high-quality housing.”
DTN first entered the Grand Rapids market in 2002 with the acquisition of Alpine Slopes in Comstock Park, at 4285 Alpenhorn Dr. The firm now owns and manages close to 1,600 units in West Michigan.
The acquisition follows the recent purchase of two multi-family properties in Wyoming by New York-based Torchlight Investors for over $144 million, according to a previous Business Journal report.
When asked if out-of-state interest could drive up rental rates in the Grand Rapids area, Colliers’ Jones said he wasn’t convinced.
While Grand Rapids will continue to draw out-of-state capital because of its level of market stability and continued growth, the “drying up” of the construction pipeline could mean limited inventory for the foreseeable future.
“I think they’re projecting continued rent growth, but I don’t think it’s too aggressive – two to three percent,” Jones said.
Jones said aside from the 601 Bond apartments and Studio Park, there are not a lot of new multi-family projects coming soon to downtown.