Mariner's Watch, an apartment project on the West Side of Cleveland that ushered in the current run of multifamily construction near downtown, now is part of real estate developer Chad Kertesz's My Place Group holdings.
My Place announced the acquisition on its web page. Cuyahoga County property records show the property changed hands Dec. 21 but do not disclose a sale price. The county assigns the 62-suite Mariner's Watch a market value of $8 million for property tax purposes, close to its original construction cost. Industry estimates put the sale price for the property in the range of $15 million, or more than $240,000 per suite.
Kertesz said on the website that Mariner's Watch is a "great addition" to the company's holdings in Ohio City, and that My Place will benefit from rising occupancy and rents it foresees in the neighborhood.
In an interview, Kertesz said the deal is the largest single investment his company has made and represents an expansion from its previous focus on realty development. He refused to say how much My Place paid for the place.
"I will say it was not cheap," he added.
Kertesz, who recently moved into a townhouse he developed on Vine Avenue in Ohio City, joked the bought Mariner's Watch because it blocked his view.
He said he did not worry about investing deeper in Ohio City because he feels the market is still growing and he considers the area one of the city's nicest areas to own apartments. Improvements to the rooftop deck, new patio furniture and other upgrades are planned, Kertesz said, as are games to add to the patio.
At 3107 Detroit Ave., the four-story Mariner's Watch building is blocks from Kertesz's Clinton West apartments on Clinton Avenue.
When the foundation for Mariner's Watch started rising from the ground in 2013, it broke a decadeslong dry patch for ground-up multifamily development on the near West Side. Multiple projects throughout the region the past few years have dramatically changed that thanks to a combination of low interest rates, tax abatements and strong demand.
According to CoStar, the online realty data site, Mariner's Watch has a 10% vacancy rate.
The seller was Ohio City Development Partners, which opened the complex in 2015. The Brian Koch-led investment group originally acquired the site in 2007 with plans for a midrise condominium development, which stalled out before construction started due to the housing bust and Great Recession.
However, the group caught the first wave of the rush to develop apartments in the region the past few years. That since has been followed by The Quarter, Church + State, The Dexter and other developments currently being built.
Sale of Mariner's Watch has long been rumored, but the website described the deal as an "off-market transaction" executed by MyPlace's in-house broker, Paul DiVincenzo, and Charles Gagliano, a vice president at Marcus & Millichap's regional office in Independence.
Koch said in a phone interview on Wednesday, Jan. 6, that he believes My Place will do well with the property because of its concentration in the neighborhood.
However, Koch said he was willing to sell because he wonders "when the ball will drop" on the current multifamily expansion and he worries about all the additional supply coming onto the market. He declined to disclose a sale price.
Kertesz did not return a call by 12:30 p.m. Wednesday.
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Trailblazing Mariner's Watch apartments in Ohio City are sold - Crain's Cleveland Business
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