A small D.C. real estate investor closed on three properties last week as the decade-old firm continues its growth.

Ernst Equities purchased a mixed-use property in Adams Morgan last week, along with two multifamily properties in Anacostia in a separate transaction.

The vertically integrated firm paid $3.1M for the 8K SF Adams Morgan property at 1737 Columbia Road NW, featuring two apartment units, ground-floor retail and a second-story hair salon. Feldman Ruel's Josh Feldman, Ian Ruel and Brandon Cardwell brokered the deal.

Ernst also partnered with D.C.-based Morningstar Community Development to acquire 48 multifamily units in Anacostia at 1301 Ridge Place SE and 4020-4022 First St. SE for a combined $4.5M.

As it undergoes a growth spurt, the firm is looking at properties that it can buy for relatively cheap and turn around, Ernst Equities Managing Partner Felipe Ernst told Bisnow. 

“We’re seeing this as a great time to buy real estate just because rates are high. There’s not a lot of competition,” he said. “And if you can find the right opportunities at the right prices, then the numbers can make sense.”

Ernst acquired the Anacostia multifamily properties, which are 50% occupied, at an auction in December after the owner fell behind on the mortgage payment, Ernst said.

The sale closed last week, and the firm is planning a “substantial” renovation of those buildings, which he said have a considerable amount of deferred maintenance.

“It’s hard right now,” Ernst said. “Rates are high and it’s a challenging market, but we’re seeing this as an opportunity to try and expand, just because there’s a good amount of distress out there.”

Office properties haven't been the only ones facing heightened distress in D.C. over the last two years. Owners of multifamily, retail and mixed-use properties have also faced capital issues and lost properties through foreclosure.

Ernst is looking for properties including ones with upside-down balance sheets, those that have loans maturing and properties that aren’t being operated properly, and it would seek to turn their trajectory around.

Ernst Equities was founded in 2015 with just three units to its name, but it has grown especially rapidly in the last few years. With about a dozen employees, the firm now owns, operates and manages over 700 units, Ernst said, more than 300 of which were purchased last year. It plans on continuing that path in the D.C. metro region.

Born and raised in D.C., Ernst received his undergraduate degree and master's in real estate from Georgetown University. He is now an adjunct professor teaching a class this semester called Multifamily Value-Add Investment and Development at the School of Continuing Studies.

Contact Emily Wishingrad at emily.wishingrad@bisnow.com