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BISNOW EXCLUSIVE: $100M TOWSON APARTMENT REDO

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BISNOW EXCLUSIVE: $100M TOWSON APARTMENT REDO
Though decked out with new kitchens and baths, Dulaney Valley apartments in Towson will be torn down and remade as luxury apartments for $100M, tripling the site's density. This comes after AIG sold the property to Wood Partners, Chesapeake Realty Partners, and Taylor Property Group.
Drew White and Lacy Rice at the DC JW Marriott on Nov. 20, 2012
Apartment Realty Advisors' Drew White repped AIG and tells us his client also sold the nearby Jazz at the Quarter and Renaissance at the Quarter in the past few months to a pension fund advisor with an interest in Wood Partners. The appetite for those units justifies the buyers' strategy to tear down the 150-unit Dulaney Valley and build new, he tells us.

Dulaney Village apartments, Towson
Both the price per unit for the property (above) and the land value were highly competitive, Drew says. The cap rate on the sale was low (less than 5%) because the exit strategy was always redevelopment, whether now or in 10 years. Both were viable options, especially in Towson, with its quality hospital, schools, jobs, and livability, he tells us. "We were selling dessert here, and depending on what you were hungry for, the cake and pie were good choices." (You can tell which holiday just passed based on the metaphors brokers use.)

Scott Zimmerly on Nov. 26, 2012
Wood Partners' Scott Zimmerly tells us another simple reason the new owners are redeveloping: Baltimore County and Towson had already approved the site plan, kind of a Phase 2 of the Quarter properties. He says the first stage, 295 units, will break ground in Q3 '13 and deliver by year-end '14. The JV aims to break ground on another 175 units in Q3 '15 as the first units are stabilizing.