A Boston real estate investing firm has arranged to acquire a three-building, high-rise apartment complex in the White Oak area of Silver Spring -- and promised to keep the 1,119 units in the rental market.
However, tenants in two of the buildings have 120 days to form an organization to purchase their buildings for the price offered by the Boston firm.
Douglas Krupp, a partner in Krupp Associates of Boston, confirmed basic details of the acquisition yesterday. One of the buildings will be acquired in a $7.5 million trade of other property with John Hancock Life Insurance Co. Krupp plans to purchase the other two buildings for $11,275,000 from the Lockwood Drive Co., a New York group.
On the firm's pledge not to convert the apartments to condominiums, Krupp said, "Our firm owns 6,000 rental apartment units throughout the nation and has never converted any apartments to condominium ownership, and does not plan to begin now."
Situated on 27 acres at New Hampshire Avenue, Colesville Road (Rte. 29) and Lockwood Drive, the three 19-story buildings were completed in the mid-1960s by Washington developer Jerry Wolman. He later sold the property, which was renamed El Dorado Towers. In a more recent name change, the building owned by John Hancock became known as Hampshire 29 and the other two buildings as Oakleaf Towers I and II.
Tenants in the two Oakleaf buildings were notified recently of the offer to purchase under requirements of recent Montgomery County legislation covering the current moratorium on condominium conversions, and giving tenants the right to match any pending offer.
"We were aware of the Montgomery legislation that discourages conversions," Krupp said. "Instead of converting, we plan to put $3 million into the total property to put it into good condition and set a goal for full occupancy." Occupancy in the three buildings has generally been improved to the 90 percent range in recent months, but Krupp said some of the units are currently unoccupied because of roof leak problems. Current rents in the range of $250 for efficiencies to $455 for three bedrooms. Most of the units are one and two bedrooms renting between $300 and $400 a month.
In acquiring the building known as Hampshire 29 from John Hancock, Krupp said that his firm is making the transaction by means of a swap for other properties. However, he estimated the value of that building as $7.5 million in the transaction. The total $11,275,027 price on the other two buildings was revealed as part of the required statements to tenants in the two Oakleaf structures, currently managed by Zalco Realty for the owners.
Shannon & Luchs had been managing the Hampshire 29 building until the recent sale transaction was completed, on the basis of negotiations begun before the Montgomery conversion legislation was passed in July.