BY ALEXANDER SOULE
Hearst Connecticut Media
AvalonBay Communities recently sold its Stamford Harbor apartment complex and adjacent marina for $115.5 million to TGM Associates, a New York City-based real estate company that owns TGM Village at Stamford Apartments on Bedford Street.
TGM made the Avalon deal days before selling TGM Willow Grove apartments in Danbury to Beachwold Residential, having acquired the 135-unit building in 2010. Both TGM and Beachwold are based in New York City; Beachwold has previously invested in properties in New Haven and Manchester.
As of 2013, AvalonBay was the third-biggest taxpayer to the city of Stamford, trailing only Harbor Point developer Building and Land Technology and RFR Realty, which owns several office buildings downtown.
The Avalon on Stamford Harbor sale was among the largest residential real estate transactions recorded by the city the past few years, trailing BLT’s $130 million sale of its Lockworks building in Harbor Point to Wafra Investment Advisory Group, and the $120 million sale of 75 Tresser. AvalonBay revealed the purchase price as part of a review of its fourth-quarter results.
As of September, AvalonBay had $63 million in debt secured by the Avalon on Stamford Harbor property.
Only a year ago, AvalonBay had given an upbeat assessment for its Northeast leasing. By July, however, the company was backpedaling, with an executive citing “pretty meager employment growth” in Fairfield County and competitive pressure from BLT during a conference call that month with investment analysts. BLT has begun leasing the Vault Apartments and is wrapping up construction on the waterfront Beacon towers across Stamford Harbor from the newly named TGM Anchor Point.
“I’d highlight Stamford, in particular, where BLT is building on the waterfront and has been building and continues to build there, putting some pressure on supply in that particular submarket,” said Sean Breslin, AvalonBay’s executive vice president of investments and asset management. “While the current environment there is somewhat challenged, I would say over the long term we’ve been pretty successful with our development franchise there. So we’ll continue to be active.”
At deadline, a TGM executive in New York City had yet to respond to requests for comment on its purchase of Avalon at Stamford Harbor or sale of TGM Willow Grove in Danbury. The company’s initials are derived from cofounders Thomas Gochberg and Steven Macy.
The newly renamed TGM Anchor Point at 150 Southfield Ave. on Stamford’s harbor includes 323 apartments in two horseshoe-shaped buildings and a marina with 74 boat slips. As of late January, TGM was listing small studio apartments starting at $1,660 a month with units ranging to three bedrooms with about 1,900 square feet.
Both building sales occurred on the heels of a Marcus & Millichap report predicting an improving market for apartments and owners of those properties. Marcus & Millichap researchers predicted the southern Connecticut economy will pull employment within 1 percent of the pre-recession peak, with escalating property values enticing many residents to rent, rather than buy.
Real estate investment companies will focus particularly on properties close to Metro-North stations, Marcus & Millichap added. In Stamford, there is ample evidence to back up that assertion, with other residential buildings in the works at the site of Stamford’s infamous “hole in the ground” downtown; the city’s old post office; and in the vicinity of UConn Stamford, where Trinity Financial is planning a building with more than 200 units. BLT itself converted the Beacon into apartments after initially contemplating a hotel at the site.
“In downtown Stamford, roughly 1,500 units will be delivered within the next three years,” Marcus & Millichap researchers wrote. “Though inventory will move up at a slower pace this year, vacancy will push up slightly, slowing rent growth for the second year in a row. Yet growing demand will keep vacancy under 5 percent.”
Hearst Connecticut Media includes four daily newspapers: Connecticut Post, Greenwich Time, The Advocate (Stamford) and The News Times (Danbury). See stamfordadvocate.com for more from this reporter.
