Apartment Investment and Management Co. has agreed to sell five suburban multifamily properties in the greater Boston region for $740 million as the publicly traded company exits that market.
The agreement, announced separately by Aimco and the buyer, Harbor Group International, marks another step in Aimco’s shift toward seeking to maximize shareholder value after the company split its portfolio in 2020 and it liquidates assets to return capital to investors.
The Denver-based real estate investment trust remains under contract to sell two properties in Miami.
Harbor Group, meanwhile, is expanding its Boston-area footprint with properties that offer value-add opportunities through renovations.
Portfolio details
The five properties, built between 1970 and 1974, span Massachusetts, New Hampshire and Rhode Island. The portfolio was 95.7% occupied as of July and has averaged 97% occupancy since 2022, according to Harbor Group.
The properties represent Aimco’s last remaining assets in the Boston market. On average, the buildings are 17 years older and command rents $465 less than apartments in the REIT’s primary markets of Chicago and Washington, D.C., according to Aimco.
The portfolio includes:
- The 902-unit Royal Crest Estates, Nashua, New Hampshire.
- The 588-unit Waterford Village, Bridgewater, Massachusetts.
- The 492-unit Royal Crest Warwick, Warwick, Rhode Island.
- The 473-unit Royal Crest Marlborough, Marlborough, Massachusetts.
- The 264-unit Wexford Village, Worcester, Massachusetts.
Harbor Group completed due diligence and made a $20 million nonrefundable deposit. Four sales are scheduled to close in the third quarter, with the final closing expected in the fourth quarter, Aimco said.
The transaction would bring Harbor Group’s 2025 multifamily acquisitions to about $2.2 billion.
Buyer’s strategy
Harbor Group views the acquisition as a chance to deepen its presence in a strong market with limited new supply competition.
The Boston area is a market “exhibiting robust multifamily fundamentals where we already have a strong operating footprint,” Yisroel Berg, Harbor Group’s chief investment officer of multifamily, said in a statement.
Berg added that “with limited new supply in the surrounding areas of each property, we will be well-positioned to leverage our local market knowledge to maintain stable occupancy levels and implement targeted renovations.”
The Virginia-based firm already owns 978 units across four Boston-area properties and has historically owned more than 3,100 units across nine Massachusetts properties.
Harbor Group plans renovations across the properties, which feature stainless steel appliances, hardwood flooring, pools, fitness centers and clubhouses.
Seller’s plans
Aimco intends to distribute the majority of the proceeds from the Boston and Miami deals to shareholders. Combined gross proceeds from both transactions are expected to total $1.26 billion, with net proceeds of about $785 million, or $5.21 per common share.
Aimco remains under contract to sell its Brickell Assemblage, which includes the Yacht Club Apartments and the adjacent 1001 Brickell Bay Drive office building in Miami, for $520 million, according to the REIT.
In July, the buyer exercised its final closing extension option and increased its nonrefundable deposit by $7 million, bringing the total nonrefundable deposit to $50 million. Closing is scheduled for the fourth quarter.
The sales of the Boston area and Miami properties, if completed, would leave Aimco with 18 apartment complexes containing 3,457 units concentrated in suburban Chicago and D.C.