Montlack Realty has sold four East Side apartment properties, as part of the homegrown landlord’s ongoing quest to shed nearly 1,500 units in Northeast Ohio.
Public records show that Smartland, a Florida-based real estate company with an office in Highland Heights, purchased the Colony apartments in June. The 153-unit complex, which runs along Van Aken Boulevard southeast of Shaker Square, straddles the Cleveland-Shaker Heights border.
In a separate deal, Bath-based Green Harvest Capital recently bought three longtime Montlack assets in Shaker Heights. Those buildings are Shaker Park Manor, with 33 units; the 25-unit Exeter apartments; and Morlee, a 19-unit complex. All three properties have Van Aken addresses.
The prices do not appear in real estate records, which indicate that the transactions were structured as entity sales. That means the buyers acquired limited liability companies that own the real estate, rather than purchasing the buildings and land outright.
Investors take that approach for a variety of reasons, including a desire to avoid up-front conveyance fees and subsequent property-tax increases tied to the sale price.
Institutional Property Advisors Midwest, an Independence-based arm of the Marcus & Millichap brokerage, is handling the sales for Montlack. Daniel Burkons, an IPA executive managing director, declined to comment on the recent transactions.
A public filing shows that Smartland took out an $8.2 million mortgage on the Colony, which is set for renovations. Vadim Kleyner, the company’s CEO, did not respond to inquiries about the project.
Smartland, which was founded in Cleveland but is based in Miami, owns and operates modestly priced apartments scattered across the region.
Green Harvest Capital also did not return phone calls. The company is focused on Class B and C apartments, so-called workforce housing where there are opportunities to invest in upgrades.
Average rents at Shaker Park Manor, Exeter and Morlee hover in the $1 to $1.20 per-square-foot range today, according to CoStar Group, a real estate data provider. Across Montlack’s portfolio, the average rental rate is about $1 per square foot.
Owner Kirt Montlack put more than two dozen properties on the market this year in Cleveland and close-lying suburbs. That’s the bulk of the company’s residential holdings. The unofficial, or whisper, price for the portfolio was roughly $100 million.
In April, buyers snapped up the 296-unit Stuart House on Cleveland’s West Side and two smaller properties in Lakewood. The remaining assets include a cluster of buildings near Shaker Square and the Alcazar, a former hotel in the Cedar-Fairmount business district in Cleveland Heights.