EDGEMOOR – A fast-growing real estate investment and management firm based in New Jersey added to its portfolio late last month, buying an apartment complex off Governor Printz Boulevard for almost $21.5 million.
Oakmark Management, based in Lakewood, N.J. acquired the 153-unit Lighthouse Hill Apartments on April 26 from Odin Properties, a Philadelphia-based real estate investment firm led by Philip Balderston. It marks the year’s largest commercial real estate sale in Delaware to date.
Oakmark has quickly made a presence in northern Delaware, crossing the $100 million investment level here last year after acquiring the 414-unit Foxwood Apartments near Newark, the 56-unit Christiana Pointe Apartments near Wilmington and the 136-unit Crossings at Limestone apartments in the Stanton area.
The acquisition of Lighthouse Hill represents a sale-to-sale return on investment of more than 400%, as Odin acquired the then-Woods Edge Apartments for just over $4.1 million in 2014. The sale translates to a per unit cost of more than $140,000.
Lighthouse Hill includes 11, three-story buildings spread over 7.75 acres. The complex features one-, two- and three-bedroom apartments or townhomes, with monthly rents ranging from $1,424 to $2,138, according to online listings. Odin reportedly planned to invest $3 million into renovations upon its acquisition in 2014.
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 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.
