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Baltimore Investor Extends Buying Spree With Apartment Acquisition in DC Suburbs

Signature Properties Has Now Acquired More Than 2,000 Units in Baltimore-Washington Corridor

A boutique apartment real estate firm that has been aggressively expanding its holdings over the past two years has struck a deal to acquire an apartment complex in Silver Spring, Maryland, its largest yet.

Signature Properties, a Baltimore-based company that specializes in midpriced communities, paid $48 million to buy Knights Bridge I, a 256-unit multihousing community built in 1984 at 3310 Teagarden Circle. The company finalized the deal with local investor Andrew Schwartzberg, who had just acquired the community last May for $40 million.

The acquisition marks the latest deal for Signature, a firm that launched in 2007 with eight units but over the past 20 months has added nearly 1,600 apartments to its portfolio, boosting its holdings to more than 2,000 apartments in the Washington-Baltimore area.

“We like the Washington, D.C.-Baltimore corridor,” Michael Katz, president of Signature Properties, told CoStar News. “It’s stable, there is job growth, lots of development and rents are increasing.”

The company has more acquisitions in the pipeline, said Katz, who declined to name the targets at the time.

Though the Washington apartment market has surged as a whole over the past decade, Silver Spring, an unincorporated area that borders part of Northwest D.C., has stubbornly lagged behind with only 1.5% rent growth per year, according to CoStar data, making it one of the lowest performers in the area.

That figure has been dragged down by a wave of new, high-end apartment construction primarily in downtown Silver Spring. The number of apartments in Silver Spring has increased by 30% in nine years, and the number of luxury apartments in Silver Spring more than doubled in that time.

However, lower-end apartments have performed relatively well, with annual rent growth exceeding 2%, according to CoStar. And at Knights Bridge I, Katz believes the rents still have room to run.

“The units have never been renovated, so there is a lot of value add,” said Katz. “We’re [also] going to be adding a fitness center, a clubhouse and a new leasing center.”

Katz also highlighted the advantages of Knights Bridge I, noting in an email that the community is already performing well at 97% occupancy, is located on a bus line and sits across from Greencastle Elementary School and the Global Food-anchored Briggs Chaney Market Place.

And with the upgrades, Katz expects the company will be able to charge a $150 premium per month once renovations are done, boosting the average monthly rental rate at Knights Bridge I from $1,500 to $1,650.

The acquisition comes on the heels of Signature’s purchase of Dunhill South in District Heights, Maryland, and Dunhill North in Baltimore in a $36.35 million portfolio deal in May. The company has now acquired eight communities since early 2018, including the 409-unit Cheverly Gardens in Hyattsville, the 242-unit Rock Glen in Baltimore and the 147-unit Parkland Square in Forestville.

For the Record

Representatives with Greysteel brokered the sale for Andrew Schwartzberg. Signature Properties brokered the deal in house.