A Denver real estate investment trust has snatched up a Brewers Hill apartment complex for $46 million as it beefs up its portfolio in the Baltimore and Washington markets.
UDR Inc. bought the 180-unit building, called Domain Brewers Hill, as more people choose to rent versus buy property in the wake of the housing bust.
Barron's forecasts
that the percentage of households who own their own home will drop to
64 percent in 2015, down from its peak of 69 percent in 2004.
UDR likes to buy property in areas where there is limited land on which to develop more apartment units and where residents have a high propensity to rent versus own a home, says Andrew Cantor, UDR's vice president of investor relations.
It also invests in areas where there is job growth. Though Maryland's unemployment rate rose to 7.4 percent in August, the state has added
33,200 jobs since January, according to the state's department of labor, licensing and regulation.
Cantor says fewer people are leaving its apartment homes � a sign that rental demand is heating up. In August, just over half of its residents left their apartment homes, versus 61 percent during the second quarter of 2009.
"That's a huge improvement for us," Cantor says. With fewer people leaving, the company can charge higher rents.
With the Brewers Hill purchase, UDR now has 2,300 apartment units in Baltimore. It owns 50,000 apartment homes nationwide.
Average rent for the one-and-two-bedroom apartments at Domain Brewers Hill is $1,975. The apartments include high ceilings, hardwood floors, granite countertops, and stainless steel kitchen appliances. UDR added free wireless Internet access to the property.
Domain Brewers Hill was built in 2009 by the Hanover Co. of Houston.
Writer: Julekha Dash
Source: Andrew Cantor, UDR