1438 Fairmont Street NW
Washington, DC

1438 Fairmont Apartments

1438 Fairmont Street NW
Washington, DC

Key Facts

Acquired: July 2009

Unit Count: 5

Product: Rental Apartments

Size: 6,700 SF

Disposed: June 2012

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1438 Fairmont Street NW, Washington, DC is a 5 unit multi-family property located in the Columbia Heights neighborhood, purchased by TRG in July 2009.

At the depth of the recession, TRG’s ability to access bank debt and raise the equity needed to complete this transaction resulted in a very attractive purchase price, substantially less than the appraised value less than 12 months before.

The seller owned the building for 10 years, and, during that time had invested a significant amount to improve the physical plant including doubling the size of the building and upgrading and/or replacing the mechanical, HVAC, electrical and other building systems. The owner also obtained a certificate of occupancy for 5 units.

Although the maintenance of the building had been recently neglected, we saw that new kitchens and bathrooms, along with other cosmetic improvements would significantly increase the rental income. Improvements included new kitchens and bathrooms, installation of energy efficient windows and mechanical systems, paint, new floors, trim and doors. These improvements were completed over a 5 month period and resulted in 5 large, luxury rental units. The combination of units with attractive finishes, large spaces in the highly desirable Columbia Heights location produced rents that were on the higher end of current market rates.

After a two month rent up period, over the next two years, this project was 100% occupied with a wait-list and produced significant free cash flow for investors. In June 2012, the building was sold