By Real Estate Alert | June 17, 2020
Another Boston apartment building has traded at a valuation agreed to before the coronavirus pandemic struck.
Akelius Residential, a Swedish investment shop, paid $21.9 million this month for the 54-unit building at 49 Worthington Street. The $406,000/unit valuation translates to a capitalization rate of roughly 3.75%. Boutique brokerage Boston Realty advised the local seller, Coppola Management Real Estate.
The deal is the second that Coppola reached with a buyer before the crisis and subsequently closed without a discount. In early April, it sold a 55-unit property at 16 Westland Avenue for $24 million to a joint venture between Multifamily Acquisition Advisors and Serone Asset Management, both of Dallas. Boston Realty Advisors also brokered that deal, which generated an initial annual yield of just over 5%.
Both properties were put up for sale late last year by Coppola, which had owned and managed them for roughly 40 years.
The economic shock and the shelter-in-place orders prompted by the pandemic have caused many property deals to be renegotiated. But several factors enabled Coppola’s offerings to trade at their agreed-upon prices. Both properties are fully occupied, and are close to employment centers and shopping districts. In addition, they offer value-added upside, as only 25% of the units have seen upgrades in recent years, leaving room for the buyers to improve the rest and boost rents.
The five-story buildings are about a mile apart. The one on Worthington Street is near the Longwood Medical Area, which has a cluster of hospitals and medical schools that drive residential demand. It was built in 1920 and has studios and one- and two-bedroom units.
The Westland Avenue property, built in 1910, has a similar mix plus one three-bedroom unit. It’s in the Fenway neighborhood, near where it meets the affluent Back Bay district.