Fairfield Completes $125M Multifamily Sale

(Read more on the multifamily market.)

PEABODY, MA-Just weeks after opening, the Highlands at Dearborn apartment complex has been sold by Fairfield Residential LLC. Located on a 25-acre parcel overlooking Route 128 in this North Shore community, the 446-unit development traded to Simpson Housing of Denver for $124.6 million, or close to $280,000 per apartment.

“This sale represents one of the largest new, 100% market-rate properties both in terms of the total price achieved and the size of the project,” says Richard Robinson, president of ARA New England.

“It’s a gorgeous property,” adds ARA New England broker Travis D’Amato, who joined Robinson and principal Terry Scott in marketing the asset for Fairfield and procuring the buyer. “A multitude” of REITs and institutional funds vied for the deal, D’Amato tells GlobeSt.com, but Simpson was able to emerge victorious, securing its first multifamily investment in the state.

“This is a good, core acquisition for them,” says D’Amato, a notion seconded by Simpson Housing VP Spencer Welton Sr. “We couldn’t be more satisfied with Highland at Dearborn’s premier location, level of finishes, and its amenity package,” says Welton in announcing completion of the sale. The interiors, he says, are “condominium quality,” featuring granite countertops, crown molding, ceramic floors and custom cabinets. Highland’s amenities include a multi-level clubhouse, billiards and media room, business center, fitness area and swimming pool.

The investment also helps establish Simpson’s management presence in the Boston area, Welton says. That affiliate, Simpson Property Group, will not only handle the Peabody asset, the parent company is in the process of permitting three other sites regionally that would produce an additional 700 apartments for management.

Highlands at Dearborn consists of 18 buildings ranging from three to four stories. The mix of one, two and three-bedroom units had an occupancy at sale of 60%. While well below the average for Massachusetts, D’Amato predicts the figure will soon expand upwards and gain acceptance among consumers seeking a class A living environment.

There has been substantial new multifamily construction north of Boston during the past three years driven by such well-known players as Archstone-Smith, JPI Properties and AvalonBay, but Welton expresses confidence that the inventory will not become oversaturated. One reason given is that a state law mandating communities accept new housing no longer impacts Peabody and neighboring towns such as Danvers and Salem. Because of that, says Welton, “additional multifamily development is highly unlikely; and therefore, Highlands at Dearborn will maintain its position as a market leader.”

On the investment sales end, D’Amato reports another brisk year among buyers, even with the departure of condominium converters. ARA New England has three class A developments on the market at present, he says, and the firm is also representing Fairfield on a 207-unit multifamily property called The Avondale in the western Boston suburb of Ashland. That class B asset is one of several deals ARA has handled locally for Fairfield, having helped the firm both divest and acquire apartment communities. Among other recent assignments, ARA sold Fairfield the Addison at Andover Park class A asset in Lawrence. Based in Grand Prairie, TX, Fairfield also has a regional presence in Connecticut, New Hampshire, and Rhode Island.