HARRISBURG, Pa. – Marcus & Millichap Real EstateServices, the nation’s largest real estate investment services firm, has arranged the sale of Ivy Ridge Apartments, a 218-unit, newly constructed, garden-style apartment complex in Harrisburg, Pa. The $25,705,000 sales price equates to $117,913 per unit, which represents a new price per unit high in the Harrisburg market this year.
Zachary Pierce and Mark Thomson, directors of Marcus & Millichap’s National Multi Housing Group in Philadelphia, represented the seller, a local investor/developer. The buyer, also procured by Pierce and Thomson, is a large operator of multifamily assets based in Northern New Jersey.
“The marketing process for this asset went very quickly due to the demand for quality assets and the increased returns that can be achieved in a secondary market,” says Pierce. “We have sold approximately one dozen properties representing more than 1,000 units in Central Pennsylvania markets over the past few years. The sale of Ivy Ridge is evidence that large private investor groups and institutions are willing today to move beyond primary markets into secondary markets in order to purchase quality assets with higher yields,” adds Pierce “Two of the top three interested parties in this transaction were New York-based institutional investment groups. In previous years, institutional investors would typically forego opportunities in the Harrisburg market, but with pricing in core markets like Philadelphia, New York and Washington, D.C. reaching 2007 levels, it has become necessary for buyers to expand their horizons,” Pierce continues. “Secondary markets with strong economic fundamentals like Harrisburg, which can offer investors a cash-on-cash return 100 to 200 basis points better than real estate in core markets, are attractive again.”
Constructed earlier this year on 12 acres, the property is located at 589 Yale St. in Harrisburg, Swatara Township. The complex is a half-mile from the Harrisburg Mall and two miles from downtown Harrisburg. Interstates 283 and 322 and the Pennsylvania Turnpike are also nearby.
"The city of Harrisburg has at times been portrayed in a less than positive light due to itstroubles, which has resulted in a certain amount of investor skepticism,” puts in Thomson. “In reality, Harrisburg’s suburban apartment market has strong economic drivers and quality school systems, and the financial challenges are contained within city limits.”
"As the capital of Pennsylvania, Harrisburg provides its residents with many employment opportunities,” Thomson concludes. “Other large employers in Harrisburg and nearby include PinnacleHealth Systems, Penn State Hershey Medical Center, and the tourist attractions in Hersey, Pa.”
Ivy Ridge Apartments features 192 two-bedroom/ two-full-bath units with private entrances and patios, most of which have skyline views of Harrisburg. The remaining 26 units are townhomes adjacent to the main complex. Community amenities include a clubhouse/leasing center with 24-hour fitness area, social room, outdoor seating with fire pit and free Wi-Fi access.