Buyer Of Market Square Launches Multifamily Push With New Hire

PRP Real Estate Investment Management made the largest office building purchase in the U.S. last quarter with its acquisition of D.C.'s Market Square. And now it is launching an effort to take advantage of distress in a different asset class.

The D.C.-based investment management company hired Matt Serenius, formerly with Swedish investment firm Akelius, to lead a new push into multifamily. 

The strategy is to take advantage of uncertain economic conditions hurting the multifamily market, Serenius said in an interview with Bisnow. He said it plans to purchase largely distressed assets to reap the benefits of a more stable market a few years down the road. 

“We just really see this as a great time to reenter the market in a big way and scale the platform,” he said.

While PRP has historically owned and managed multifamily, the company over the last decade has shifted its focus to net-lease office, industrial and data centers. Serenius said the company’s last multifamily purchase was of a 298-unit apartment community in Gambrills, Maryland, in 2017. 

Serenius scaled Akelius’ U.S. residential portfolio to a $1B business, he told Bisnow, serving as vice president for more than eight years. 

Now he hopes to transfer that ability to PRP as a multifamily director at a time the firm sees as optimal to be in the market for properties. 

“Given the pricing and just the cap rates, interest rates, this is a really good time to enter the market,” he said. “And the people that make smart buys now will be rewarded three to five years from now.”

The firm has owned 4,000 multifamily, condominium and assisted living units over its lifetime, Serenius said, but today it owns roughly 500 across two properties.

One of those properties is a new office-to-residential conversion in Alexandria that it completed in March 2023. That property, the Sinclaire on Seminary at 4900 Seminary Road, is now stabilized at 90% lease-up, Serenius said. 

With this multifamily expansion, Serenius said PRP's goal is to start with a focus on the East Coast, including throughout the DMV. But eventually, the company plans to expand nationally. 

“We have high expectations of entering the space over the next few years and buying a significant amount of properties,” he said. 

PRP has $5B of assets under management. Earlier this year, the firm paid $323M to acquire Market Square, a 696K SF office property on Pennsylvania Avenue, from Blackstone and Columbia Property Trust. 

This isn't the first time PRP has pivoted its strategy amid market shifts. In 2021, the company sold four properties for $1B and said it would set aside $2B to acquire logistics and data center properties. 

By February 2022, it had acquired 4.5M SF of industrial properties across four states for $425.2M. In April that year, it acquired 22 acres in Manassas for a data center campus planned for over 1.1M SF. PRP President Paul Dougherty told Bisnow that it has assembled a total of 40 acres on the site.

“We are excited to make this important strategic hire to further build upon our talented team as we embark on an interesting new phase of the commercial real estate cycle,” Dougherty said in a release about the Serenius hire Tuesday. “Matt is an extremely accomplished commercial real estate professional, and we look forward to benefiting from his expertise as we navigate the evolving real estate investment climate here in the United States.” 

Meanwhile, Akelius entered the U.S. market nearly a decade ago. It has 14 properties in D.C., 11 in New York, 10 in Boston and 3 in Austin, according to its website. 

In D.C., the company had a steady stream of purchases in the first two years of the pandemic, including 346 garden-style apartments in Reston, a 214-unit property in Clarendon and a 251-unit building in Fairfax in 2021, as well as a 136-unit apartment building in Woodley Park in September 2022. But it doesn’t appear to have made any acquisitions in the region since. 

In January, Akelius purchased a 68-unit building in Cambridge, Massachusetts, for $28M. Serenius said he left the firm in late 2023. 

Akelius didn't respond to requests for comment.

UPDATE: APRIL 29, 4:20 P.M. ET: This article has been updated to include more information about the company’s Manassas data center venture.

UPDATE, APRIL 30, 2:10 P.M. ET: This story has been updated with a statement from PRP President Paul Dougherty.