July 25, 2022

Armada Hoffler sells Residences at Annapolis Junction for $150M

By Carley Milligan at Baltimore Business Journal

The Residences at Annapolis Junction sold this month for $150 million, the property’s developer Armada Hoffler said Monday.

Virginia-based Armada Hoffler constructed the 416-unit building in 2017. The mid-rise community includes features such as an outdoor pool, fitness center, community room, pet-friendly apartments and close proximity to the Savage MARC train station.

The complex was developed as part of the larger $180 million Annapolis Junction Town Center project that also includes office and retail. It is located in Howard County off of Route 32 between Route 1 and the Baltimore-Washington Parkway at 10125 Junction Dr.

At the time of the sale on July 22, the residential property was 97% occupied, according to Armada Hoffler. The company declined to disclose the buyer.

The sale contributes to a goal set by Armada Hoffler last quarter to sell up to $200 million of noncore, or non-essential, assets at cap rates in the mid-4% cap range, president and CEO Lou Haddad said in a statement. Cap rate, or exit rate, is used to estimate the resale value of a property at the end of the holding period.

With The Residences at Annapolis Junction deal, the developer says it has now completed the sale of $177 million in noncore assets at a blended 4.1% exit cap rate. The other transactions include a $24 million sale of two single-tenant assets in Durham, North Carolina, and an unnamed $3 million retail sale.

Proceeds generated from the sales will be used to satisfy Armada Hoffler’s equity needs “for the remainder of the year and probably well beyond,” Haddad said. He added that the company will now be able to continue developing its current project pipeline without debt or equity from capital markets.

Armada Hoffler has long been an active developer in Greater Baltimore, notably with a growing investment in Baltimore’s Harbor Point peninsula. The developer is a partner in the construction of T. Rowe Price’s new 550,000-square-foot offices, as well as a new hotel, 1,370-space parking garage and 350-unit apartment complex. Together, the projects will bring Armada Hoffler’s stake in Harbor Point to $1 billion.

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