Wednesday, November 14, 2018

Friedkin Realty Group Pays $53 Million for 156-Unit Philadelphia Apartment Building

The acquisition of The Isle, a 156-unit apartment building in Philadelphia's Manayunk submarket by San Francisco-based Friedkin Realty Group last month, represents a significant milestone as the highest price per unit ever paid for a major apartment property in Northwest Philadelphia.

The deal, for just over $53 million or about $340,000 per unit, was also the first sale of a large-scale apartment development completed in the Northwest Philadelphia area following the most recent recession. The sellers, Realen and Barings, wrapped up construction on The Isle in early 2017 and brought the property's occupancy to more than 85 percent.

The Isle’s $340,000 per unit sale price trounced the previous record of $223,000 per unit set by the 2015 sale of Madison Hill House, which was built in Chestnut Hill during the 1960s. And, more recently, Goldman Sachs Asset Management paid $170 million this past summer when it purchased two other Chestnut Hill properties, Chestnut Hill Village and Blossom Row, which totaled a combined 821 units and traded at approximately $207,000 per unit.

Philadelphia’s apartment development activity has continued to expand out from Center City into submarkets long devoid of new, large-scale developments. Other multifamily developers considering projects in Northwest Philadelphia are likely eyeing The Isle’s sale as a barometer for the level of pricing that newly-built apartment properties in the area can command following a initial lease-up period.

One such project, Grasso Holdings’ 142-unit Ridge Flats development at 4300 Ridge Ave. in Philadelphia's East Falls submarket, is less than two miles from The Isle. After recent design revisions the project completed Philadelphia’s Civic Design Review process in October and Grasso is aiming to break ground before the end of the first quarter of 2019.

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