JPI Multifamily Partners shedding D.C. apartments

Texas luxury apartment developer JPI Multifamily Partners is shedding three of its high-end apartment buildings in the District, tapping into an investment-hungry pool of buyers looking to snatch up high-end rentals in the Washington area and nationally.

148

JPI Mulifamily Partners LLC has an offer to sell its 909 at Capitol Yards at 909 New Jersey Avenue SE for about $95.4 million to a pension fund managed by JPMorgan Chase Bank N.A., according to documents obtained by the Washington Business Journal. JPI has reportedly reached a deal to sell two others, the Jefferson at Capitol Yards at 70 Eye St. and the Axiom at Capitol Yards at 100 Eye St., for a combined $258.8 million, according to neighborhood blogging site JDLand. JPMorgan is also the reported buyer of the Axiom, according to JDLand.

JPI tapped CBRE Group Inc.’s multifamily sales team to market all three properties for sale over the summer. The properties are more than 90 percent leased. CBRE broker William Roohan confirmed the prospective buyer is the same for all three buildings. He said tenants’ leases would not be impacted if the apartments change hands.

Residents in the buildings were recently notified of the pending sale, as is required by D.C. law, and given the chance to band together to make a competing offer to buy the buildings. Roohan said if that does not happen, the deals could close in about 75 days.

Representatives from JPI, based in Irving, Texas, could not be reached for comment. A spokeswoman for JPMorgan declined comment. Roohan said JPI always planned to sell the apartments once they were stabilized and decided now would be a good time to market them to prospective buyers after consulting with CBRE. The strategy could be a sound one for JPI given the state of D.C.’s rental market. Vacancy rates in the region now stand at about 3.8 percent, according to Delta Associates Inc., one of the tightest markets in the country. Reflecting that, the region posted $3.7 billion in multifamily sales in the Washington area through November 2011, according to Jones Lang LaSalle. That was up from $3.5 billion in 2010.

D.C.-based Jefferson Apartment Group executive Greg Lamb said with that as a backdrop it makes sense that JPI is looking to sell now rather than two years ago, when the market was not as strong. Lamb, left JPI in 2009 to form his new company with another former JPI executive, Jim Butz.

Author: Daniel J. Sernovitz, Washington Business Journal