EDGEMOOR – A rapidly growing New Jersey-based real estate investment firm recently acquired the Chateau Estates apartment complex for $26.5 million, according to county land records.
The buyer was Capital Management, an owner-operator of multifamily complexes primarily in New Jersey that broke the $100 million investment mark in Delaware last year after it acquired the nearby Colony and Colony North apartments off East Lea Boulevard for a combined $69.55 million.
The Lakewood, N.J.-based firm has kept a low profile like other New Jersey-based investors that have increasingly acquired Delaware assets, such as Oakmark Management, Montium, Goldcrest Properties and more.
The seller was Olive Tree Management, another Jersey-based firm that is active in Delaware but primarily operates in Pennsylvania and New Jersey. Chateau Estates marks Olive Tree’s second divestiture in Delaware in two years, but last year it also acquired the Hillside Pointe apartments in Claymont for $38 million.
Multi-family properties in the northern Wilmington suburbs have been increasingly bought and sold in the past five years, especially as investors seek to attract Philadelphia-area workers.
The 58-year-old Chateau community at 312 Shipley Road features one- or two-bedroom units with monthly rents ranging from $1,295 to $1,625, according to online listings. With 168 units, the sale price translates to a per unit cost of more than $157,000.
The New Orleans-inspired community also offers a fitness center, dog park and private balconies for every unit.
Capital Management did not respond to a request for comment on the sale.
The multifamily market continues to be one of the hottest parts of Delaware’s commercial real estate market over the last year, with more than half of last year’s Top 10 sales coming from such properties. The rising values of homes in the state have only made apartments more valuable as those unable to afford properties seek rentals.
While the acquisitions targets for multi-family have been cheaper than 2022 when values routinely stretched past $30 million, three of the eight sales of at least $10 million so far this year have come in the asset class, including the sales of Lighthouse Hills in Edgemoor, The Saville in Wilmington and Colonial Village near New Castle.
Notably, the cost of borrowing has risen steadily over the last year, as the Federal Reserve has tried to tame runaway inflation, moving the core interest rate from less than 1% to more than 5%. Banks have also become more selective with their lending amid the current environment, further stemming the number of deals being completed today.
