In 2023, Charleston, South Carolina-based apartment owner Lakeland Capital was very active in the apartment acquisition market, expanding its portfolio on the East Coast.
But this year, the sales environment has grown more competitive, especially with deals marketed by brokers, according to Alexander R. Westra, managing partner at Lakeland Capital.
“This year in particular, I think it's been very challenging to get deals done, not so much because of a dislocation in price between buyers and sellers, but just because everyone is sort of on edge with the volatility and taking a defensive stance,” Westra said.
However, Lakeland is still active in the market, making roughly $40 million in acquisitions in 2024, partially because it taps into its network for off-market purchases. In September, the firm, with roots in Massachusetts, secured 135 Main Street in Upton through a relationship with the previous owner.
“It was an opportunistic acquisition that we bought truly off-market without any involvement of an intermediary,” Westra said. “We actually knew the seller, so we were able to get a really good price on the deal.”
Upgrades planned
Lakeland Capital and Boston-based private real estate investment and management firm Seabrook Real Estate Partners will jointly manage and renovate the property.
“We have a good team in place there to implement the improvements,” Westra said.
While some of the apartments were already upgraded, Lakeland and Seabrook plan to renovate about half of the units, putting in new flooring, cabinets, appliances, countertops and paint. “It's a classic value-add deal,” Westra said.
Upton sits minutes to Worcester and 40 minutes to Boston. “It has really been a high-growth area,” Westra said. “From an investment perspective, we think there's better value in price given the growth there.”
Lakeland also recently sold one asset in Massachusetts and recapitalized another. Generally, the firm prefers value-add investments with three- to five-year holds.
“We're fortunate to have access to capital and an investor base that has been with us for the past few years,” Westra said.
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