Baltimore, MD – A joint venture organized by Alex. Brown Realty (ABR) and TWG Development, LLC (TWG) has taken title to a 2.3-acre site in Indianapolis, Indiana on which it plans to develop a 215-unit apartment project to be known as Lockerbie Lofts. ABR Chesapeake Fund IV, a value-add real estate fund sponsored by ABR, invested $7.1 million in the venture. The project will be financed via a loan from PNC Bank.
Lockerbie Lofts will contain 215-units in four, four-story buildings as well as 2,027 square feet of street-level retail space and a 244-stall underground parking garage. Apartment units will feature high-quality interiors and community amenities will include a fitness center, swimming pool and landscaped courtyard with fireplace. Construction is underway and is expected to be completed within the next 18 months.
Lockerbie Lofts is located one and a half blocks south of the Massachusetts Avenue Arts District in the heart of historic Lockerbie Square, one of downtown Indianapolis’ most desirable urban neighborhoods. TWG had acquired the site at a very attractive basis via an off-market transaction in early 2011 and began to program the site for the Lockerbie Lofts development in late 2013. “We think the time is right for this project,” commented Tony Knoble, president of TWG. “The location is compelling and the market fundamentals are extremely sound – occupancy among Lockerbie’s competitive set exceeds 95% and rental rates within the downtown submarket have increased on average by 4.8% since 2008.”
“TWG’s ability to acquire the land at such a low basis will allow the venture to deliver an institutional quality project at a cost well below the price of recent downtown Indianapolis apartment sales,” noted Tom Burton, ABR’s CIO. Burton also noted that the basis has allowed the joint venture to underwrite rental rates at a 5% to 10% discount to projects currently in the lease-up stage. “As a result, we have downside protection if the market softens and ample upside if, as expected, the market remains tight.”
The acquisition represents the first transaction between ABR and TWG.
Alex. Brown Realty is a privately owned real estate investment manager organized in 1972 and headquartered in Baltimore, Maryland. ABR co-invests with joint venture partners in a broad spectrum of property types located throughout the United States. www.abrealty.com
TWG Development, LLC is an Indianapolis-based real estate development company specializing in commercial, market rate, affordable and senior housing developments. TWG was formed in 2007 to develop, own and manage housing communities. Through its related entities – TWG Construction, LLC and TWG Management, LLC, TWG is able to see a development through from concept to lease-up and stabilization. www.twgdev.com