Toll Bros. kin buys Chesco apartments at $99,000 each

Millview Apartments, a 350-unit complex on the heights above PA 82 on the north end of Coatesville, sold for just $34.5 million, or $99,000 a unit (and $95 a square foot), to Paradise Property Group, a group including Jeff Franz, son-in-law of Toll Bros. boss Robert Toll, the same local developers who last year purchased Oxford Gateway near West Chester.

Builder Carl Chetty, of Kennett Square, at first considered selling the units as condominiums, but rented them instead, and put the project on the market for $42 million in 2007, Marcus & Millichap associate Mark Thomson, who handled the deal with vice president Ridge MacLaren, told me.

Property values plunged that year, and occupancy also fell to a low of 70% in the recession, Thomson said. But the proprtion of occupied units recovered to 93%, before a September fire damaged a 22-unit building at the complex. The fire didn't affect the price because the building was insured, he told me.

"We got a lot of offers," Thomson added. He said the buildings sold at a modest capitalization rate (rent/price) of between 6 and 7 percent.

The units fetched half what Korman group managers paid for units at Cornerstone Terrace in Exton in 2008, before the worst of the real estate collapse, Thomson noted. Exton is wealthier, closer to corporate job centers, and generally pricier than Coatesville.