Building community

Equity Residential has made a lot of friends in Hyattsville, Md., in the past year or so. Ever since the huge apartment REIT bought developer Mid-City Financial's interest in the partially completed 260- unit Mosaic at Metro in July 2008, the largest apartment REIT in the country has worked to capture the hearts and minds of the city's residents.

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By feeding its hungry, honoring its heroes, beautifying its landscape, supporting local artists and offering discounts to those who teach the children and keep the community safe, the company that owns and operates 146,000 units in around 540 apartment properties in high- growth markets from coast to coast has proven itself a good neighbor and valuable addition to the small community just outside Washington, D.C., city officials agree.

“The first thing they did when they came into Hyattsville was a food drive and they filled up a two-bedroom apartment with food to give to the Capitol Area Food Bank, because there’s been a lot of publicity about the food bank shortages. So that says a lot about them,” said Hyattsville Mayor Bill Gardiner. The drive was undertaken as part of President Obama’s Renew America Together initiative.

In addition to the month-long food collection that was coordinated by city employee Colleen Aistis and Equity Residential public relations specialist Catherine Timko, founder of The Riddle Company, the REIT donated $1,000 to the food bank.

“And they brought the idea of a Hometown Heroes park to us,” said Police Chief Douglas Holland of Overlook Plaza at Mosaic at Metro, which celebrated its official grand opening on June 18 with the dedication of that park to local heroes, in conjunction with the police department’s memorial ceremony for one of its own.

Heroic coincidence
“It was like we had some kind of outside intervention from somewhere,” Holland said of the serendipitous scheduling of Overlook Plaza’s dedication and the city’s plans to recognize the 25th anniversary of the death of the only Hyattsville police officer ever to die in the line of duty.

Every year on June 18, the police department conducts a small graveside service to remember Officer Robert John King, who joined the Hyattsville police department in 1979 and gave his life in the line of duty during the pursuit of a stolen motorcycle on June 18, 1984. “But this year, we were looking for something to do to make it special and here was this opportunity,” said Holland.

Instead of ending the memorial at the graveside last June, a motorcade of some 25 vehicles, including eight motorcycles from four jurisdictions, led the way from the cemetery where King was buried to Overlook Plaza, which provided a perfect setting for the continuation of the memorial ceremony.

“We had invited a lot of retired officers back and Officer King’s widow and daughter, who were very happy with Mosaic and the garden and the fact that everyone was making the day so special for them. It was a very, very moving day for everybody,” said Holland.

“It was a very touching and significant way to recognize the contributions of Officer King. I would love to see all local and national companies take the interest and care in their community that Equity Residential has shown,” said Gardiner, who promoted King posthumously to the rank of corporal and presented a plaque to King’s widow, Jane Appelbaum, and his daughter, Kristen King Eytel, who was just two years old when her father died and is expecting her own first child, a daughter, in November.

Deals for the dedicated
Numerous local and state leaders, along with representatives of local, state and park police, firefighters, and military personnel, gathered in Mosaic’s Overlook Plaza, where a plaque that honors those who contribute to the health and safety of the community was unveiled as part of the ceremony.

As it does in other apartment communities across the country, especially those close to military bases like Fort Meade, which is around 10 miles north of Hyattsville, Equity Residential recognizes those pillars of the community by offering them special discounts, including 50 percent off security deposits, 50 percent off move-in fees and the waiver of application fees.

“When you see that kind of development and when you see companies that are not just here for the profit actively engage with the community, it makes it very special,” said Holland, a 10-year veteran of the city’s police force and 25-year resident of Hyattsville.

The apartment community, which was 89 percent leased by the end of July, also recognizes the city’s burgeoning arts community by exhibiting in its lobby a sculpture by local artist Alan Binstock, who also created unique glass keepsake ornaments for presentation as move-in gifts to new residents of the apartment community.

Opportunity in transition
And, although the ownership transition midway through construction of Mosaic at Metro was atypical, it presented an outstanding opportunity for Equity Residential to control a well-located asset immediately adjacent to a Metro-rail station.

“I knew some of the folks that were working on the project and one of the partners in Mid-City knows some of our people in Chicago. So, it was a kind of conductivity on two levels,” said Richard Boales, senior VP of development for Equity Residential’s East Coast region, explaining how the off-market deal came to the closing table some 12 months ago.

While that coincidence made it easy to initiate the deal, figuring out how to transition the project that was around 60 percent complete from one owner to another wasn’t so simple. “We had to work hard to understand all the economics of their project and make sure that we understood what the total cost to complete was going to be and sometimes, in the middle of a project, you’re dealing with a moving target,” he said.

“Once we had a good feel for what had to be done to get completed, we were able to derive a price that worked for us and worked for them,” said Boales. He explained that the financing was easy because Equity Residential, the company that was founded by Chairman of the Board Sam Zell in 1967 and went public in 1993, was able to assume the 221d4 HUD loan that Mid-City had in place.

“It was both a construction loan and a permanent loan, so the financing was there for us to step into their shoes,” he said, estimating the acquisition cap rate at around seven percent.

Part of a bigger picture
The transit-oriented nature of the deal meshes perfectly with the walk-ability goals of the city that has “A world within walking distance” emblazoned around the perimeter of its municipal emblem.

Mosaic is part of a 22-acre, mixed-use development for which Taylor Development has been the master developer since 2000. The 24-year-old mixed-use development company that maintains offices in Aventura, Fla., and Bethesda, Md., won the opportunity in a Washington Metropolitan Area Transit Authority (WMATA) RFP about 10 years ago at about the time the transit authority began to realize its plan to create mini-metropolises of mixed-use development around all 15 of the Metro-rail stations in Prince George’s County.

“Taylor Development was awarded the development rights around this whole station and that included retail, office and a residential piece that was then carved out for Mid-City. Taylor built the retail, which is now complete, and there was a lot of infrastructure work that had to be done in and around the station,” said Boales.

The Mosaic project was particularly complicated because of its location at the confluence of both a Metro rail and Metro bus transit hub. “You’ve got buses coming in and out of this Metro station constantly all day. It’s really, really busy. So, there was quite a bit of logistical work that had to be done prior to the actual commencement of the building’s construction,” he said of the project that didn’t start going vertical on its 5.4-acre site until 2006.

Three years later, Mosaic at Metro consists of seven four- and five- story buildings wrapped around structured resident parking and decorated with parks and water features like the retention pond turned landscape amenity that has become the summer home to a mother Canada goose and her gaggle of goslings.

And the lease-up of the apartments is going quite well, with new renters signing up at rate of 20 to 25 per month, said Robert Grealy, area VP for Equity Residential’s property management arm, attributing the community’s relatively healthy leasing velocity to its trendy design by architect Niles Bolton Associates and its location.

Cars take a hike
Residents of Mosaic’s studios and one- to three-bedroom apartments can walk to more than a million square feet of retail and restaurants and a movie theater. The public library is right across the street and the Prince George’s Plaza Metro Green Line station is a two-minute walk from Mosaic’s front door.

“So you can live here at Mosaic and easily walk to literally everything you want to get to and you can jump on the Metro and get into downtown Washington in about 15 minutes. That’s a great combination,” he said, adding that a phenomenon that is taking place in the region is turning back the transportation clock.

“We’re hearing more and more people, especially young people, saying, ‘If I can live in a place like this, I can do so without my car.’ A couple or two people living in a unit can share a car. So on all our urban properties — our newer ones, especially — we’re seeing a much lower demand for parking,” he said.

Grealy’s operating team is seeing people who are not as anxious to take on the burden of car insurance and a car payment, when they can live at a place like Mosaic and walk anywhere they need to go or use public transportation to reach a further destination.

And, thanks to the numerous amenities the community offers to its residents, which include a 24/7 fitness center, a clubhouse with a business center, a screening room, and a cyber cafe, some residents are finding that, while the rents that range from around $1,500 for a one-bedroom to around $2,200 for a three-bedroom unit may be a little higher than the rent at the apartment they moved out of, they are saving money on gym memberships, movies and transportation, coming out wealthier in the end in a nicer apartment.

Quality attracts quality
The city’s Community Action Team (CAT), created about 18 months ago, also hopes to become a resident at Mosaic, locating a substation there, said Lt. Gary Blakes, leader of the four-man squad that deals with quality of life issues.

“Hyattsville is one of the oldest communities in Prince George’s County and one of the things we pride ourselves on is being very responsive to our residents,” he said, explaining that, as the three- mile-square city has grown, it seemed that kind of responsiveness was being lost, so his department came up with CAT to deal with things like litter control and loud music — anything that would interfere with quality of life and make living in a community less satisfying.

He believes communities like Mosaic, Post Properties’ nearby 396-unit Post Park and the mixed-use University Town Center that includes office, retail, student housing and condominiums diagonally across the street from Mosaic will attract similar upscale developers.

“Mosaic is one of the premier projects that’s been done in Hyattsville and, because it is doing pretty well, a lot more development is coming into the city,” said Blakes, agreeing with the mayor that the market will benefit from the presence of upscale, new development.

“And having high-quality living options, actually having a range of living options — high-end condo, brand new rental communities, detached housing — having all that close by makes it more appealing for government and other tenants considering the area,” said Gardiner.

“We have probably 900 garden apartments that are at least 35 years old and I think the benefit of having Post Park and Mosaic in Hyattsville may be to draw some folks out of the Class C product,” said Gardiner who hopes those older communities then might be candidates for redevelopment or replacement by value-add investors.

And the company’s commitment to smoothly melding the apartment community that is themed “A masterpiece in the making,” into the neighborhood has not gone unappreciated by its leaders. “Equity Residential is a large property owner, but they stay close to the community and they give back to the community, so it’s been a pleasure working with them,” said the mayor.

Although a newcomer to Hyattsville, Equity Residential has, over the years, acquired or developed around 13,000 apartments in more than 60 apartment communities in and around Washington, D.C.