RST Development has sold Amber Commons, a 198-unit multifamily asset outside of Washington, for $51.5 million. The buyer, a joint venture between SKS Realty Partners of Rockville, Md., and Los Angeles-based MRK Partners, landed $43.8 million in acquisition financing, public records indicate. The lender was Bear Creek Asset Management.

The property at 7 Prism Place in Gaithersburg, Md., opened in 1968, later undergoing a full gut-rehab renovation in 2009. The community’s floorplans range from 916-square-foot one-bedroom to 1,425-square-foot three-bedroom units, according to Apartments.com. Amenities include a swimming pool, fitness center, and clubhouse.

In the next year, the new owners plan to invest $8 million to convert the market-rate property into an affordable housing community with low-income housing tax credit syndication, updating units and common areas. While SKS is primarily focused on market-rate assets, the firm selected an affordable housing strategy for this asset based on its partnership with MRK, SKS’ managing partner, Kevin Smith, said.

Statewide Affordability Crisis

Maryland faces an enormous affordability challenge, a state government report from late 2020 highlighted. Some of the major findings from the report include a notable shortage of 85,000 units for households earning less than 30% of area median income, with nearly 100,000 families earning less than 50% of AMI expected to move to the state by the end of the decade.

Although year-over-year rent growth in the Washington, D.C. metro fell by 60 basis points in September last year, according to a Yardi Matrix report on the market, rents in certain parts of the metro — particularly suburban zones like Gaithersburg — have increased significantly. At the same time, with few reports of new affordable housing developments within the area, the affordability crisis specific to central Montgomery County could become more pronounced.