Marcus & Millichap brokers $31.9 million sale of apartment portfolio in Rhode Island

Newport, RI Marcus & Millichap completed the sale of the Newport Portfolio, a 33-property, 96-unit multifamily portfolio in Newport and Portsmouth, R.I. The portfolio sold for $31.965 million, or $333,000 per unit. The 32 properties sold in Newport are more than half the entire multifamily inventory sold in the city last year and the portfolio is the largest privately held collection of market-rate apartments to be sold in the city.

“Multifamily prices have risen substantially since 2019 and restrictive zoning, scarce land and high construction costs have kept new supply to a minimum,” said John Craig, director investments with Marcus & Millichap. “Nearly nine of 10 multifamily owners in Newport hold a single building, making an offering of this scale exceptionally rare.”

 Craig and Matthew Pierce, in association with Thomas Shihadeh, Marcus & Millichap’s broker of record in Rhode Island, marketed the portfolio on behalf of its longtime owner, a private investor, and procured the buyer, Lake Hill Investment Group, a real estate investment and management firm based in Greenwich, Conn. The marketing process produced more than 100 signed confidentiality agreements.

“The owner built a unique and complex operating business around this scattered-site portfolio, and the opportunity was awarded to a buyer that demonstrated true creativity and sound execution,” said Shihadeh.

Located on and around Broadway, Newport’s historic main street, the properties are mostly two- and three-family buildings with units that average 1,080 s/f. Local employers include the U.S. Naval Undersea Warfare Center, Salve Regina University, and Newport Hospital.

“Under the same management for more than 20 years, the portfolio has experienced virtually no vacancy over that time other than units taken offline for major renovations, and annual turnover is typically less than 15%,” said Pierce. “Lake Hill plans to pair continued investment in the buildings with hands-on management from an office on Broadway. The focus is on the basics: clean, well-maintained buildings, repairs handled quickly and someone who answers when residents call. Residents will also be able to pay rent and request repairs online or from a phone.”

“These homes are for Newport locals, people who live here year-round,” said Adam Friedman, principal of Lake Hill Investment Group. “We are building on a portfolio that was carefully looked after for more than two decades, and we intend to take the same care of it.”