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Posted on Wed, Jan 18, 2012 : 5:59 a.m.

2 Ann Arbor apartment complexes sold for $85.7M in record-setting deals

By Paula Gardner


Lake Village Apartments is one of two Ann Arbor complexes bought this month in a record-setting deal involving The Habitat Co.

Chris Asadian |

Two of Ann Arbor’s largest commercial properties were bought for a combined $85.7 million this month by an entity of the Chicago-based company that had been managing them.

The Habitat Co. LLC acquired Windemere Apartments and Lake Village of Ann Arbor from Northwestern Mutual Life Insurance Company.

The deals set records in the Ann Arbor market for the price paid per unit, signaling local impact of the national multifamily market experiencing a rebound.

Sources said the Windemere deal is a record $92,083 for the 1980s-era property on the city’s north side near Nixon Road.

And the Lake Village deal, at $115,277 per unit in the complex on South Main Street, is the highest in the market, based on information available to Habitat, said Matt Fiascone, senior vice president of finance and investment.

“We think it’s the highest price per unit paid,” he said. “But we think it’s still a really good value. It makes economic sense.”

As proof, Fiascone cited the lending and partnership in the purchase with Goff Capital Partners, a Fort Worth, Texas- based private equity firm. Goff is an investor in both deals.

Both complexes are on the list of Ann Arbor’s largest taxpayers in 2011, with Windemere coming in at number 8 based on a taxable value of $17.25 million and Lake Village coming in at 18 with a taxable value of $10.8 million. Combined, the properties account for 0.6 percent of the city’s total property tax revenue.

Neither property caters to the traditional campus market, Fiascone said, but both benefit from proximity to the University of Michigan and its position as an employment driver in the city.

“Higher education and medical (facilities) are … two of our preferred economic bases that we like to see in markets,” Fiascone said.

Windemere has 480 units: 80 one-bedroom units and 400 two-bedroom styles. Rent is $1,020 to $1,478, and occupancy at the time of sale was listed at 98 percent.

Lake Village rent is $955 to $1,669 for its 360 units that range from one bedroom to three bedrooms.

Habitat’s portfolio - both owned and managed - is largely based near Chicago. It owns 30 properties, and its management portfolio includes apartments, condos, 33 public housing projects and eight affordable housing complexes.

Other states that it operates in include Georgia and Missouri, along with Michigan, where it owns Lafayette Towers in Detroit and manages 5000 Town Center in Southfield and Riverfront Condos in Detroit.

Habitat has about $2 billion in assets and 20,000 units under management, according to its website.

Fiascone, who started working for Habitat in August, said he’s spearheading an acquisition program for the company, making these deals among the first of what’s likely to be a significant increase in its portfolio.

That strategy will be built on the company traditional core of development then acting as owner-operators, he said.

“The history of the company is that nothing is short-term,” he said.

The deals come as the national apartment sector emerges as one of the bright spots in commercial real estate. While residential housing has been battered by the economy, the apartment market now is seeing high occupancies and increasing base rents.

According to the National Real Estate Investor, apartments are outpacing the recovery of other property types as the national apartment vacancy rate fell from 8 percent to 5.6 percent in the third quarter of 2011.

Rents increased 2.3 percent in 2010, according to the same report, due to strong demand and a lack of new construction.

“It’s probably the strongest sector in commercial real estate,” Fiascone said.

He doesn’t expect those factors to change soon in Ann Arbor, he said, despite a wave of new construction near the University of Michigan campus. Student housing is a different niche from Habitat’s properties, he said, estimating that fewer than half of the residents are even graduate students.

The pricing of the apartments is notable in the Ann Arbor market, Fiascone acknowledged.

But he also said it's a good indicator of the local economy and how it's still significantly better than other markets in Michigan.

"Hopefully, times are improving and (will) continue to improve," he said, "at least locally."

Paula Gardner is News Director of She can be reached by email. Follow her on Twiter.


Haran Rashes

Wed, Jan 18, 2012 : 7:23 p.m.

Hopefully this will be a nice increase in the Ann Arbor Tax base. The current SEV is $17.25 million for Windemere Park and $10.8 million for Lake Village for a combined $28.05 million. That is an assessed value of $56.1 million. The new combined assessed value should be $85.7 million with a taxable SEV of $42.85 million. That is unless they do some legal maneuvering and shell corporations so the city cannot increase the SEV. AnnArbor.Com should make a note to check it out this March (though this sale may be too late to be reflected in the 2012 SEV) or next year. Maybe we can get a nice new piece of art with the extra tax revenue.

Terry Redding

Wed, Jan 18, 2012 : 9:29 p.m.

Hey, nice idea on the art. With our without the extra tax (obviously).


Wed, Jan 18, 2012 : 6 p.m.

"Windemere has 480 units: 80 one-bedroom units and 400 two-bedroom styles. Rent is $1,020 to $1,478, and occupancy at the time of sale was listed at 98 percent. Lake Village rent is $955 to $1,669 for its 360 units that range from one bedroom to three bedrooms." With those rents, why not go further and convert them into condominiums?

say it plain

Sun, Jan 22, 2012 : 12:17 a.m.

I don't see how much higher they can push these rents and still have 'stable' tenants really.


Wed, Jan 18, 2012 : 8:13 p.m.

You do understand that the condo market is depressed and not growing. People who rent do NOT want to necessarily buy. They rent because they may be a visiting professor at UM, maybe doing some doctoral work, might even have a temporary job assignment that is projected at 2 years or less. Not everybody wants to own. Think of the poor fool who bought in 2007 and is now stuck with a property worth half what he paid for it. Rents do not skyrocket as rapidly since 1. There is usually a one year lease 2. If you push rents too high, people move 3. Stable tenants are what the rental market loves, not turnover, ESPECIALLY in luxury level apartments (which these would be considered).


Wed, Jan 18, 2012 : 4:13 p.m.

A lot of these properties have been flipped from one buyer or owner to another because of the depressed real estate market. Once that happens, the properties are not maintained as well as they should. There is too much of a positive spin in this piece of news but I hope the new buyers keep up with their good intentions. I have heard and seen this act before.

say it plain

Sat, Jan 21, 2012 : 11:59 p.m.

The role of, especially the business people end of it, has been and always will be to be cheerleaders for real estate sales and up up up on prices there...


Wed, Jan 18, 2012 : 2:28 p.m.

Lake village is a fantastic property. It deserves a high price, and rent should not be cheap in a place like this. They are truly an exemplary property in terms of upkeep and management.


Wed, Jan 18, 2012 : 4:10 p.m.

As long as it is maintained properly. Thus far, it has been maintained and appears well kept. A lot of these properties have been flipped from one buyer/owner to another, lately.


Wed, Jan 18, 2012 : 2:09 p.m.

Free market economy, or would you rather have rent control in Ann Arbor?


Wed, Jan 18, 2012 : 1:08 p.m.

Where the economy is good, land is very valuable.


Wed, Jan 18, 2012 : 1 p.m.

Uppy uppy goes the rents.good luck people that live there.Your wallets are about to get hit big time.


Wed, Jan 18, 2012 : 12:53 p.m.

Will these record-setting deals lead to record-setting rent prices?


Wed, Jan 18, 2012 : 1:01 p.m.

I'd say the chances r pretty good tyhat rent go sky high.