Broadtree Residential has paid $137.5 million to acquire three class A multifamily apartment communities from affiliates of Chesapeake Realty Partners (CRP) in Broadtree’s inaugural UPREIT transaction.
Two of the assets (1901 S. Charles and 2 East Wells) are located in Baltimore, and the third (The Overlook) is located in greater Harrisburg, Penn. In aggregate, the properties are comprised of 633 total residential and two commercial units. All three communities are managed by WPM Real Estate Management, a Baltimore-based third-party property manager.
In an UPREIT transaction with Broadtree, property owners contribute real estate to the fund’s operating partnership on a tax-deferred basis in exchange for equity, in the form of Operating Partnership Units (OP Units).
As a result of this transaction, the sellers contributed more than $25 million of equity into the operating partnership of BTR, and they now have interest in a diversified multifamily portfolio offering. Post-closing, Broadtree has an asset base of nearly $350 million, comprised of eight multifamily communities and 2,181 total units.
“This transformational transaction is the first of what we hope will be many UPREIT deals for Broadtree,” said Chris Czarnecki, Broadtree’s CEO. “Broadtree operates in a competitive multifamily marketplace, and one of the ways to create shareholder value is via the sourcing and execution of complex UPREIT transactions. This portfolio acquisition also provides BTR shareholders important geographic diversification, and enhances our portfolio with additional stabilized assets that we plan to hold for the long-term. We look forward to announcing additional exciting acquisitions throughout the rest of 2018 and beyond.”
