Rio Owner, Peterson Cos., Acquires Rockville Apartment Complex For $135.5 Million

Peterson Cos. has acquired the 402-unit Huntington at King Farm: Phase II apartment complex in Rockville for $135.5 million, according to a recent BizJournals report. This is the first residential holding for Peterson Cos. in Montgomery County. On the retail side, Peterson Cos. owns Downtown Silver Spring, Milestone Center in Germantown, and Rio Lakefront in Gaithersburg. Peterson Cos purchased the property on September 21st.

“Located at 801 Elmcroft Boulevard in Rockville, Huntington at King Farm: Phase II is a unique multifamily property in the prestigious King Farm neighborhood. The community has a total of 402 rental units, 165 of which are townhomes with private parking garages. Originally built in 2000 with generously sized floor plans of nearly 1,200 square feet on average, the community has benefitted from by long-term institutional ownership that maintained the property to a high level. Since 2011, approximately 342 units have been renovated.

Huntington at King Farm: Phase II is in a favorable location, walkable to King Farm’s retail and the Rockville Metro Station and situated in the second-largest life sciences research talent cluster along the I-270 Biotech Corridor proximate to the Shady Grove Innovation District (breaking ground 2024). The property is currently 95.52% occupied and Peterson Companies has renovations planned for the remaining units, demonstrating their commitment to enhancing the community for all residents.”

According to CBRE’s Mid-Atlantic Multifamily H1 2023 Report, sales volume in the Mid-Atlantic through the first six months totaled just $1.94 billion, a 64 percent decrease year-over-year, and 46 percent below the long-term H1 average since 2014. Despite the decrease recorded in H1, the latter half of the year historically records a higher sales volume, and investors are still active in the market. Strong demand and market fundamentals offer strategic investment opportunities for multifamily buyers and point toward a resurgence beginning in the latter half of 2024.

The King Farm neighborhood contains single-unit detached homes, townhouses, apartments, a shopping center, and stand-alone office buildings all on a former 440-acre farm. The City of Rockville annexed the farm property in 1995, approving its redevelopment as a neo-traditional neighborhood with a grid street pattern and a mixture of land uses and housing types. Construction began in early 2000 and parts of the original plan are still coming to fruition. King Farm was designed to accommodate multi-modal transportation with extensive sidewalks, bikeways, and a regional transit line (the Corridor Cities Transitway), all with connections to the Shady Grove Metro Station.

Preserved from the former King family farm, or “Irvington Farm,” the farmstead, and its associated two dairy barns,
two tenant houses, and other ancillary buildings, are situated on property owned by the City that is designated as a local historic district and a City park. The City, with a priority for preservation, has stabilized or rebuilt several buildings on
the site, though the long-term maintenance and use of the property remains in question. In August 2016, the Mayor and Council convened a community task force to determine the best possible future use for the site, though no final decisions had been made on the task force’s recommendations as of the date of this writing.

King Farm Village Center is the primary retail center for the neighborhood, with 120,000 square feet of commercial space, including a major grocery store. Approximately 760,000 square feet of office space and a hotel are located west of the main residential community near I-270. King Farm was originally planned for more than 3 million square feet of Class A office space in the Irvington Center section west of Gaither Road. However, some of the allocated office capacity has been converted to residential townhouses and senior housing (i.e., Ingleside’s senior living, assisted living, long-term care and rehabilitation services) due to changing market demand.

Information courtesy of the City of Rockville Comprehensive Plan and a press release from CBRE

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