250 Arlington Apartments Bought for $32.4 Million

ARLINGTON — The $32.4 million purchase of 250 apartments at two properties in this Boston bedroom community is a multifamily family affair in more ways than one, as Sycamore Property Management founder Sean Wilder has teamed up with father-in-law Andre Danesh to secure the off-market deal backed by $21.1 million in financing from Leader Bank.

The transaction was arranged by Leigh Freudenheim of Newmark Grubb Knight Frank representing the family of the late David P. Wilfert, builder of 60 Pleasant St. and 1-17 Old Colony Ln.

“The developer did a very good job with the properties,” Danesh tells the Real Reporter this week in explaining he considered the quality of the structures key in committing to the deal after Wilder had assessed it at Freudenheim’s urging and determined the $129,000 per key to be attractive enough that, Wilder recalls, “we quickly tied it up.” There were extenuating circumstances, including a condominium structure for the holdings in which about 100 units are privately owned and intermingled with the apartments at 1-17 Old Colony Ln., but Wilder relays that the positives outweighed any complications. “It’s not very often that this much inventory is available in one shot in Arlington, and I was immediately impressed,” he conveys, adding that the two investors “have an understanding of fractured condominiums” in their ownership of 77 units at the 84-unit 4 Bishop St. complex in Framingham. That property, he says, is “a model of efficient management and a jewel of the Framingham community” that gives Danesh and Wilder insight into how to handle such situations. The Arlington properties will be under Sycamore’s purview, and Wilder expresses an eagerness to take advantage of the “significant un-tapped value and tremendous near-term upside” offered by the investment. “I knew . . . I could bring the property’s performance up to the level that it is capable of,” conveys Wilder, citing a “history of mismanagement, high expenses, erratic NOI and a vacancy rate higher than the local average” as areas in need of rectifying.

“Remarkably enough, however, both properties had been very well-maintained,” Wilder outlines in seconding Danesh’s assessment. The seller had spent considerable capital replacing such bigticket items as new roofs, masonry and structural concrete, outlines Wilder, “leaving the buildings without much need for near-term capital expenditures.” With the vision in focus, Danesh and Wilder sought out financing and found an apt partner in Arlington-based Leader Bank after being aggressively pursued by multiple sources. According to Wilder, Danesh and he value using such institutions. “Local lenders typically have their finger on the pulse of the local community and have a vested interest in real estate in their own backyard,” Wilder says. Attorney Mark McCue of McCue, Lee and & Green put the duo in contact with Leader Senior VP Cheryl Glantz, then met with her and CEO Sushil Tuli. “We all agreed that the acquisition price of the asset left little doubt that it was a terrific deal,” details Wilder, with Leader then presenting an aggressive offer that worked both on terms and from an operational standpoint.

“Knowing that we were on a tight timeline and needed to close quickly, Leader was able to get through the underwriting process and get us to the closing table inside of 30 days,” marvels Wilder, adding, “Leader’s flexibility and ability to move quickly and move in-step with us was very important to us considering the size and complexity of the transaction.” Danesh accedes that the capitalization rate under 5 percent did give him a bit of pause, but the pedigree of the holdings and the community itself mollified any concern.

The veteran investor is among those voicing concerns about a possible multifamily bubble, and says the best way to avoid problems is to focus on proven venues and markets. “I am very happy with this deal,” he says, a notion shared by Wilder. “We are very bullish on Arlington,” he stresses, with upside in rental growth and a solid demographic both diverse and sporting a large professional contingent thanks to close proximity to both Cambridge and Boston. “The buildings fit well into our portfolio of assets and well be an excellent long-term position for us,” predicts Wilder. Meanwhile, Danesh and his son-in-law are continuing to pursue other multifamily ventures in Boston and beyon