AvalonBay Unloads Four DC Buildings in $447M Sale

AvalonBay Communities is offloading a major slice of its D.C. holdings, selling a four-building portfolio to Foulger Pratt for $447 million.

The Potomac, Maryland-based Foulger Pratt already closed on three properties totaling 1,110 units — two in NoMa and one in Gallery Place — with a fourth slated to follow in the coming weeks, Bisnow reported. The deal comes out to $358,000 per unit across 1,248 apartments.

The largest piece is the 469-unit Avalon First and M, which traded for $182 million and has been rebranded Mira First & M. Next door, the 438-unit AVA NoMa sold for $142 million and became Slate at NoMa.

In Gallery Place, the 203-unit Avalon at 770 Fifth Street NW went for $86 million and was renamed The Esquire on Fifth. Foulger Pratt financed that acquisition with a $59.4 million Capital One loan.

Still to close is the 138-unit AVA H Street, priced at $36 million.

The buildings come with a handful of retail tenants spread across the portfolio, including a Starbucks at Mira First & M and a Streets Market with Andy’s Pizza inside Slate at NoMa.

Foulger Pratt partnered with PCCP and Tryline Capital on the deal.

The three closed properties were 95 percent leased at the time of sale. Foulger Pratt plans renovations as part of a value-add strategy. The acquisitions expand its D.C. portfolio to more than 2,900 units, while AvalonBay is left with about 1,500 apartments in the city proper.

For AvalonBay, the sales are part of a broader pruning effort. On its July earnings call, Chief Investment Officer Matthew Birenbaum said the REIT had multiple dispositions in the works across D.C., Seattle and New York.

He noted that D.C. deals proved “particularly challenging” under the city’s Tenant Opportunity to Purchase Act, which gives renters first crack at buying their buildings. At the H Street property, tenants exercised their rights but ultimately assigned them to Foulger Pratt.

This year, the Virginia-based REIT agreed to double its stake in the Texas multifamily market by buying two apartment communities in Austin and six in the Dallas-Fort Worth area in a nearly $620 million deal.

— Holden Walter-Warner