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Passco Lists Pair of Carolina Apts. as Potential Value-Add Play

280-Unit Encore at the Park in Durham, 246-Unit Wakefield Glen in Raleigh Pitched as Candidates for Renovation
January 22, 2018
Pictured: Encore at the Park in Durham, one of two communities being marketed for sale by Passco.

Two North Carolina apartment complexes hitting the market will be a test - how much will investors pay for value-add assets in the red-hot Southeast?

Passco Cos., the apartment player based in Irvine, CA, has hired Newmark’s ARA arm to shop Encore at the Park in Durham, NC, and Wakefield Glen in Raleigh, NC. The two-property portfolio totals 526 units of apartments, and both properties were completed in 2000.

Passco paid $64.9 million, or $123,000 per unit, for the communities in 2013. This time around, market players think the properties will trade for $77 million, or $146,000 per unit. Investors can bid on the properties individually or as a pair.

The opportunity here is to renovate the apartment interiors - upgrade the appliances and flooring, replace the lighting and plumbing fixtures - and boost rents. That way, the properties can still undercut the rents at the newly-finished rentals in the Triangle, and still see significant rent increases.

Encore at the Park, at 2850 Courtney Creek Blvd. in Durham, NC, is a 280-unit complex. It features a mix of one- to three-bedroom apartments with washer and dryers, wood flooring and patios, sunroom and balconies. The property sports a pool, with a spa room, a fitness center and club house.

Wakefield Glen is located at 2400 Garden Hill Dr. in Raleigh. The 246-unit, garden-style complex also includes a mix of one- to three-bedroom apartments. The units have faux wood flooring, patios or balconies, and cathedral ceilings. The property’s amenities include a swimming pool with a gazebo, a fitness center and a resident club house.

2018 is assumed to be a year where rental properties outside the downtown area - and with some upside potential - will dominate the sales market.

John Doherty, Multifamily Reporter  CoStar Group   
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