GRAND RAPIDS — An East Lansing property management firm closed this week on a deal to buy a 107-unit apartment building just east of downtown.
An affiliate of DTN Management Co. acquired the Waters House apartment building on East Fulton Street between Union and College Avenues in Grand Rapids’ historic Heritage Hill neighborhood, according to commercial real estate sources.
Matt Jones, an associate vice president for multifamily investments in the Grand Rapids office of Colliers International Inc., represented both the buyer and the seller, Waters House Apartments LLC, an entity registered to James Triant.
The deal — which fetched $10.25 million for the sellers — attracted 18 offers, Jones said, noting the “majority” of offers were from outside the region. However, DTN’s offer offered the most compelling terms, he said.
Colin Cronin, DTN’s vice president and co-owner, said on Tuesday afternoon that the acquisition of Waters House — which stands at nearly 100-percent occupied — represents an “expansion of (DTN’s) footprint in downtown Grand Rapids,” noting that the firm already manages multiple properties in the central business district and surrounding neighborhoods.
DTN plans to invest about $2 million into upgrades for the units, adding that the building is in “bulletproof” condition.
“When you have a chance to buy an asset like this, you can’t pass it up,” Cronin said.
Jones at Colliers noted that the property, built in 1961, offers some unique attributes in that it was built as a multifamily facility, as opposed to having been converted into apartments. Also, the property had been in the same family since it was built.
The closing for Waters House comes just weeks after a New York City firm acquired two apartment complexes in southwestern Kent County for at least $215.3 million, as MiBiz first reported.
While Grand Rapids offers more affordable rents than many large cities around the country, landlords are still raising their rates locally, according to a recent report from Apartment List, a San Francisco-based listing firm.
The rising rents and the limited amount of inventory available for purchase are driving investors to the market, according to Jones.
“There’s limited inventory for deals … and there’s a lot of people, both locally and nationally, that want to deploy capital here,” Jones said. “When deals come available, they’re hot and heavy.”