Next Realty LLC
has acquired the 64-unit Dolphin Square apartments in Wauwatosa for $10.3 million.
An affiliate of the Skokie, Illinois-based real estate investor bought the apartment building last week from its former owners, according to state records. The ownership group included a pair of revocable trusts and other individual sellers.
The three-story building is located at 10300 W. Bluemound Road, across the street from the Milwaukee County Zoo. It is fully occupied, Next Realty said in a news release. It has a mix of studio, one- and two-bedroom units, plus 88 indoor parking spaces.
Dolphin Square attracted Next Realty's attention because of its location near major freeways and major employers such as the Milwaukee Regional Medical Center, Eteri Zaslavsky, Next Realty managing director, said in an interview.
Next Realty will complete renovations to the building that the previous owners started. The building has a new roof, windows, siding and high-efficiency steam generator
. The lobby, common areas and some of the units are newly renovated.
Next Realty said it will continue updating the residential units. Improvements will include new appliances, cabinets, plumbing fixtures, bathroom vanities and tiles, and updated flooring.
“The Milwaukee multi-family market is extremely tight, with vacancy of less than 3%,” Branko Kuzmanovic, Next Realty director of acquisitions, said in a statement. “We are excited to add this asset to our portfolio.”
Zaslavsky said the units will be brought more in-line with market-rate rents. She said the rates will fall between the lower end of the market and the higher end being charged at newly built apartment complexes.
"We love being in between that space," she said. "For us, that's a perfect place to be, because we think there's going to continue to be a lot of demand there."
Andy Hess, Kemp Collings and Cole Wirth represented the sellers in the deal.
Dolphin Square is the first acquisition as part of Next Realty Fund X. According to U.S Securities and Exchange Commission filings, Next Realty is seeking to raise $25 million.
Zaslavsky said her firm is targeting properties in Madison, Milwaukee, Indianapolis, parts of Ohio and to a lesser extent Chicago for its Fund X.
Next Realty's "bread and butter" is multi-tenant shopping centers, Zaslavsky said. The company is considering a shopping center in Madison as possibly its next acquisition. It purchased the 17,000-square-foot Hillside Terrace shopping center in Delafield in 2019 as part of its Fund IX.
This is Next Realty's second multi-family property acquisition in the Milwaukee area this year. It was also part of the group that bought 12 apartment buildings
on Milwaukee's Near West Side from local developer Rick Wiegand. Those properties have 232 apartment units in all, and fetched $16.15 million.