Multifamily brokers form new venture: MMG

Multifamily property owners have a new team of experts - and a new firm - to turn to when considering a sale.

Alex Blagojevich and Michael Sullivan will lead Mid-Markets Group Real Estate Advisors (MMG) as founding partners and executive managing directors, leveraging their multi-market approach to ensure clients receive maximum exposure from interested and qualified buyers.

The duo, along with four others on the MMG team, brings more than 50 years of collective brokering experience and a vast, nationwide network to its new venture that plans to assist owners of multifamily properties in determining the best strategy for their holdings.

Recognizing the long-standing brokerage framework centered on siloed markets is growing increasingly obsolete, MMG leaders seek to establish a new type of multifamily firm built with the client at the center of the business.

“As part of the industry’s recovery from the recession, a growing number of investors are turning to the multifamily sector for more consistent, predictable yields. In turn, fund advisors are forced to expand their search for properties outside of their historical market focus, and MMG is poised to execute on this well,” said Blagojevich.

Its advisors aim to maximize value for multifamily property owners by providing a fully integrated advisory platform from acquisition to disposition. The team has extensive experience with all subsets of multifamily properties, including student, affordable and senior housing and land services.

Owners benefit from MMG’s national reach, access and expertise. Though the team rose to prominence in the industry selling across the Midwest, South and Southeast, they have continued to expand their market coverage into a national focus.

Collectively, the MMG team have closed nearly 500 multifamily transactions across 110 unique markets in 31 states for a total of more than 100,000 units and $6 billion in gross sales, building a knowledge-base of similar markets and an expansive network of qualified buyer prospects.

“MMG’s diverse relationships allow us to explore opportunities among private and institutional investors. That combination gives MMG the advantage of quickly generating interest from multiple qualified buyers by accessing capital unavailable to other brokers,” said Sullivan.

The team prides themselves on taking a detailed, strategic approach to every assignment and creating the highest-quality marketing materials tailored to each property and market.

“We’ve put together a talented team that delivers exceptional service to our clients, and that’s just one of the secrets to our success. We have the knowledge and resources to support clients every step of the way,” Blagojevich said.

“We don’t believe in one-size-fits all solutions. Rather, every client, every asset and the ultimate objective for each listing is unique. By customizing each solution so that it is aligned with the client’s objectives, we’ve successfully helped hundreds of property owners meet or exceed their goals.”

Prior to launching MMG, Sullivan and Blagojevich led the Berkadia Mid Markets brokerage team to notable success in 2020. By leveraging an aggressive approach despite difficult market conditions, they closed more than $935 million in gross sales.

“Coming off of a challenging year has only ignited our passion for amplifying our ability to deliver outstanding client service. We look forward to maintaining and increasing our momentum in 2021, leveraging our one-of-a-kind, full-service approach to consistently exceed clients’ expectations and deliver profitable outcomes,” Sullivan said.

Berkadia sweeps $214 million in Midwest property run

In just the past eight weeks, Berkadia’s Midwest brokerage team has closed on $214.75 million in combined sales of fourteen properties.

“While overall activity in the multifamily investment sales space was down over 50 percent year-over-year, our Mid-Markets Group has remained busy with gross sales through the end of September of more than $725 million. We have taken an aggressive approach to assist those clients who needed to transact despite the difficult market conditions,” said Michael Sullivan, managing director of Berkadia’s Mid-Markets Group.

The properties include Oak Tree Square Apartments, Lakeside Village, Cold Storage Lofts, Citadel Suites and Apartments and Ames 6 Portfolio.

“The fourteen deals we’ve closed over the last eight weeks represent the last of those deals that we listed prior to the onset of the COVID-19 pandemic,” said Alex Blagojevich, senior managing director at Berkadia.

“When the full magnitude of the pandemic hit the U.S. in March, it reshuffled the market fundamentals of the entire multifamily sector, resulting in a disconnect between buyer and seller expectations. Overcoming this disconnect was our greatest hurdle to getting these deals closed, but we kept both sides communicating, and in the end, the average difference across all of those transactions between the final sales price and the price we quoted the seller was in the two-percent range,” Blagojevich said.

Transactions recently closed by the Berkadia Mid-Markets Group include:

·       Oak Tree Square Apartments, located at 12800 14th St. in Grandview, Mo. The 189-unit garden-style multifamily property was a Section 42 LIHTC affordable deal sold by Missouri-based Worcester Investments. Managing director John Schorgl of Berkadia’s Kansas City office secured financing for the acquisition on behalf of the buyer, a private syndicator out of Texas. The 10-year Freddie Mac loan includes three years of interest-only payments, and the deal closed on August 18, 2020.

·       Lakeside Village, a 75‐unit, garden‐style apartment community located in North Kansas City, Mo., was sold by Kansas-based Eighteen Capital Group to a private syndicator new to the Kansas City market. This off-market, direct sale was completed in just 45 days, as the buyer was rushed to complete this final piece of a larger 1031 exchange. Senior managing director Chris Blechschmidt and director Emily Stang of Berkadia’s Chicago office secured the acquisition financing. The deal closed on August 19, 2020.

·       Cold Storage Lofts is located at 500 E 3rd St. in the River Market area of Downtown Kansas City, Mo. Sold by a locally-based Kansas City firm, Maxus Properties, this 224-unit, adaptive reuse, midrise apartment property was ultimately purchased by a New York-based investor. After launching in late March, just weeks after the start of the shutdown, the Mid-Markets Group utilized the power of their extensive network and virtual touring to show the deal to more than 150 buyer groups. After receiving 10+ formal offers, they were able to get the deal across the finish line on September 23, 2020 at the agreed upon contract price, equating to a trailing 12-month cap rate in the low four percent range.

·       Citadel Suites and Apartments, located at 5113 N Brookline Ave. in Oklahoma City, Okla., was sold by a private family trust. The 114-unit garden-style multifamily property was purchased by a local, Kansas City-area firm after beating out more than 18 formal offers on the property, many of which had non-refundable money at execution of PSA. The deal closed on August 10, 2020.

·       Ames 6 Portfolio features six multifamily properties totaling 296-units, all located in Ames, Iowa. After launching the deal in early January, the Berkadia sales team pushed more than 150 interested buyer groups into the data room despite the oncoming pandemic and huge amount of uncertainty surrounding the student housing market. The portfolio was sold by Iowa-based Professional Property Management to a private, Chicago-based firm who closed the deal on September 7, 2020 at an in-place cap rate in the mid five percent range. Properties in the portfolio include: Colleen Crest, Delores Apartments, Gateway Hills, Maple Glen, Phoenix Apartments and River Burch.

The Berkadia Mid-Markets Group is led by Sullivan, Blagojevich and managing director, Ralph DePasquale. The team also includes senior directors Patrick Jordan and Chris Bruzas, directors Parker Stewart, Chris Gentry and Brett Meinzer and associate directors Dominic Martinez and Alex Malzone, who completed the sales on behalf of their respective sellers.

Separately, Berkadia’s Mid-Markets Group also recently completed the sale of Steeplechase on Maple, a 314-unit garden-style multifamily property located in Omaha, Neb., financed by Berkadia’s Blechschmidt and Stang; and the Wichita 5 Portfolio, a portfolio comprised of five multifamily properties throughout the Wichita, Kan. metro area.

Opus Group delivers Westley on Broadway apartments to Westport

This week The Opus Group announced the completion of Westley on Broadway, a six-story, mixed-use apartment complex in the heart of Kansas City's historic Westport neighborhood on the corner of Westport Road and Broadway Boulevard.

Comprised of 254-units and two furnished community guest suites, residents will enjoy the luxury features within each unit, including chef-inspired kitchens and stainless steel appliances, nine-foot ceilings, designer backsplashes, smart-unit technology, luxury wood-style flooring and in-unit stackable washers and dryers. Units are offered in a mix of junior studio, studio, alcove, and one- and two-bedroom floorplans.

Additional features include onsite storage with available bike storage, pet-friendly living with a pet spa and dog washing station, electric vehicle charging stations and a 24-hour state-of-the-art fitness center.

“The wellness center is an additional amenity that is advantageous to residents. Comparable to any high-end, full service gym, features include fitness machines, a cross training rig, barbells and free weights, a private fitness studio with a TV for utilization of personal training classes or training apps, a full size sauna and Wi-Fi spin bikes with on-demand classes. Residents can also continue to use the heated pool throughout October this year," said Devon Coffey, senior manager at Opus.

Besides the plethora of amenities, the six-story apartment development also includes three levels of underground parking and 10,000 SF of retail space.

To complement the surrounding architectural details, and give a nod to the history of Westport, Opus selected a blend of red brick and added oversized windows and heavily framed black retail storefronts with overhead steel beams.

Opus is the developer, design-builder, interior designer, architect and structural engineer of record.

Read related December 2018 MWM article here: http://www.metrowiremedia.com/news/opus-mixed-use-poised-to-trigger-westport-road-redevelopment

Belton approves residential development trifecta

This week the  Belton (Mo.) Planning Commission voted to recommend approval to Belton City Council rezoning, redevelopment and new additions of three projects totaling over 500 units to serve young professionals, families and seniors.

Recommendations included rezoning from C-2 to R-3A and a preliminary development plan for Center 301 Apartments, at the southeast corner of Towne Center Drive and East Markey Parkway.

In the same session, the commission approved 137 lots for single-family and 10 lots for single-family attached homes in the Autumn Ridge subdivision as well as the addition of 53 senior living units to the Traditions subdivision.

“Growth in the development of single-family homes as we’ve seen today with the Autumn Ridge plan continues at a remarkable pace for the city of Belton,” said Dave Clements, director of planning and building.

“Combined with the 53 new Traditions units, which will help relieve the pressing demand our citizens have for quality senior living options, and the Center 301 multi-family units, we are adding capacity for what could be 1,000 or more Belton citizens depending on how many occupy each residence, Clements said.

The preliminary plan for the developer, Case & Associates, includes the $34 million Center 301 Apartments. The multifamily housing complex will house 306 Class-A units with a mix of one-bedroom / one bath, or two-bedrooms / two baths; many with first-floor garages. All residents will have access to a dog exercise area, walking trail, swimming pool and cabana as well as a clubhouse that features a fitness facility, business center and outdoor kitchen. The developer expects rates to range from $965 to $1,420, depending on market conditions.

In the third phase of the single-family development Autumn Ridge, located on the west side of South Mullen Road, includes 137 single-family and 10 lots for single-family attached homes with a neighborhood playground and trail.

Traditions Villas, a 55 year+ restricted community on the northeast corner of Mullen Road and Sycamore Drive, proposed an addition of 53 garden-level, 868 SF one-story villas with two bedrooms across a total of 10 buildings. Each will feature a front porch and back patio and laundry and has access to a community building which will have onsite management and maintenance offices and provide space for resident gatherings.

Partners on the Case & Associates developments include Architects Collective, Tanner Consulting, Schlagle & Associates and Quist Engineering.

The city council will make final determination on the rezoning for the Center 301 project from C-2 General Commercial District to a R-3A Planned Unit Development, and on its Preliminary Development Plan, at its October 13, 2020 meeting.