AvalonBay Communities, Inc. announced this week that it had completed the sale of two Washington, DC-area properties this month for $332 million. The Arlington-based company sold Avalon Decoverly in Rockville, Maryland for $135 and Crystal House in Arlington, Virginia for $262.5 million. Both properties were sold at a weighted average initial year market capitalization rate of 5.2%. Mack-Cali Realty Corp., a real estate investment trust, purchased Crystal House in a joint venture with a fund advised by UBS Global Asset Management. Walker & Dunlop LLC provided a $165 million mortgage loan to the JV through a Fannie Mae program, according to a CoStar report.
"The Mack Cali/Roseland team is thrilled to be entering the Metro DC market, one that offers enormous potential. When we've completed the renovation project, we are confident that we'll be able to command rents at the highest end of the market," said Mitchell Hersh, president and chief executive officer of Mack-Cali.
AvalonBay completed its acquisition of Archstone Enterprise with partner Equity Residential last month; Crystal House was acquired as part of its Archstone Enterprise deal, according to a Washington Business Journal article. AvalonBay and Equity Residential formed the joint venture partnership to buy Archstone's assets. AvalonBay got 40% of the portfolio, or 60 apartment communities, including thousands of apartments in the Washington area, while Equity Residential got the remaining 60%, or 78 properties.
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