Elion Partners and Buchanan Partners plan to acquire a 164-unit multifamily housing property and an adjacent 3.5-acre land parcel in Montgomery County, Md. The asset and adjacent land parcel were acquired for $34 million, with the total project estimated to cost over $100 million.

The project is located next to the Glenmont Metro Station, which sits on the northeastern terminus of the Washington Metro Red Line. Glenmont is in the burgeoning Montgomery County region, which has recently seen an influx of more professionals seeking a convenient commute to Washington, D.C. As a result, Glenmont currently has a need for enhanced living and lifestyle amenities.

Elion and Buchanan will execute a multi-phase strategy intended to bolster residential quality through renovation of existing apartments while also working to develop the 3.5 acres adjacent to the property. The new development will include 254-multifamily units, with construction expected to begin in the first quarter of 2019.

The project marks the third development partnership between Elion and Buchanan. The joint venture has developed more than $150 million in real estate throughout the U.S. mid-Atlantic region. Together, both firms provide fully integrated hands-on operations throughout all aspects of asset management, from development to accounting.

“We are thrilled to announce another promising transaction with Buchanan, one of the industry’s leading real estate developers in the region,” said Juan DeAngulo, managing partner and co-founder of Elion Partners. “This partnership has already been tremendously rewarding over the years and we look forward to continuing our integrated offering.”

“Our project in Glenmont will allow us to deliver new Class A multifamily inventory in a supply constrained market while improving the existing apartments, enabling us to provide upgraded market-rate housing at affordable rental rates,” said Jimmy Roembke, principal of Buchanan Partners. “We are excited to partner with Elion on this transaction and look forward to our continued investment in Glenmont.”

National Health Investors Inc. has agreed to finance the development of a 144-bed skilled nursing facility located near Milwaukee, Wisc., for a commitment of $25.35 million.

The initial funding under the commitment was $4,700,000 and construction is underway and expected to be completed in the second quarter of 2020. A 12-year lease term begins post-construction with two 10-year renewals and a 2.0% annual escalator. The facility, Ignite Medical Resort Oak Creek, will be operated by a tenant entity owned by affiliates of Villa Healthcare and Ignite Medical Resorts.

“We are excited to enter into a new relationship with Villa and Ignite, under a newly formed entity by principals with extensive experience operating large portfolios of skilled nursing facilities and strong relationships in the market area,” said Eric Mendelsohn, NHI’s president and CEO. “We believe this new relationship will provide an excellent opportunity to expand our presence in this market.”

“Villa has had great success in Wisconsin, and we are looking forward to furthering our commitment to the Milwaukee Market,” said Ben Israel, president of Villa Healthcare. “Opening the newest and most modern Skilled Nursing Facility in Wisconsin through this new partnership with NHI, as well as continuing our ongoing relationship with Ignite Medical Resorts in this venture, was an easy decision as their values align with ours.”

The multifamily market has so far had a solid 2018, with rent growth of 3.1 percent.

Demand continues to be the main driver. Household formation is running at roughly 1.5 million per year, helping fill the 300,000 multifamily units of new supply, according to the Multifamily National Report for November 2018 from Yardi Matrix. Occupancy rates of stable properties have remained above 95.0% for over two years. Robust job growth and a long-term population shift have propelled warm-weather and West Coast metros.

Las Vegas (7.4% year-over-year) and Phoenix (6.6%) have the highest rent growth, while Atlanta (5.4%), Orlando (5.2%) and Tampa (3.9%) are all among the top metros.

Despite the brush with rent control (which failed to win a referendum in the November election) and increasing problem with affordability, rents continue to march upward in California. The Inland Empire (5.4%), San Jose (5.0%), Los Angeles (4.2%), San Francisco (4.0%) and Sacramento (3.8%) are all among the top 10 metros in rent growth.

Job growth ranges between moderate and robust in those metros, but the big issue in most of the state is supply; California desperately needs new stock to house the number of people that want to live there. The five California metros in the top 10 for rent growth all are among the bottom seven in deliveries as a percentage of stock. Sacramento and the Inland Empire are growing at less than 1% per year, while San Francisco, San Jose and Los Angeles are adding less than 1.5% to stock per year.

The metros with the highest supply pipelines are maintaining occupancy rates and moderate rent growth. That includes Nashville (6.5% supply growth, 2.6% rent growth), Austin (5.0%, 3.5%), Denver (4.9%, 2.8%) and Miami (4.2%, 3.4%). On the flip side, Houston’s rent growth lags at 1.3% despite healthy job creation numbers.