UPDATED – Wichita may have just seen its largest apartment transaction ever.
“There might be one bigger, but I’m not aware of it,” broker Tim McKay says of the recent sale of Sundance Apartments across from Bradley Fair.
The 496-unit complex was built at 1945 N. Rock Road in the 1980s.
New York-based Somerset Partners, which bought the property more than a decade ago, has sold it for an undisclosed price to Florida-based Pensam Residential.
“That’s very significant for Wichita because Pensam is a very highly recognized institutional investor – very sophisticated,” says McKay, who is senior managing director for ARA Newmark’s Oklahoma, Arkansas and Wichita offices and represented the buyer and the seller in the Sundance deal.
McKay says Pensam owns thousands of units across the country.
“We’re really pleased,” McKay says. “There was a significant amount of interest from national buyers on this property.”
McKay says it’s typical for equity investors such as Somerset to buy a property like Sundance, hold it for a period of time and then sell it to “deliver the return to your investors and go do it again.”
Now is a good time for investments in the Midwest, McKay says.
“We just have a lot of new buyers interested in our market because they’re chasing yields they just cannot get on the coasts.”
Another factor is international investors doing business in what McKay calls gateway cities such as New York and San Francisco.
“We have a significant increase in international investors in real estate in the United States in general,” he says.
That’s driving other investors to more central areas of the country, McKay says.
“They’re looking elsewhere trying to get a solid return.”
McKay says developer George Laham’s Bradley Fair is part of what makes Sundance attractive.
“It’s very significant for Wichita, and they can be very proud of the Bradley Fair development and what George Laham’s done there.”
The transaction price should be available through public records within a few weeks. Look for a follow-up then.