A Northwest D.C. multifamily building bought by its lender in a foreclosure sale last year has been sold to a new buyer.

The four-story Arbor at Takoma, at 218 Cedar St. NW, was acquired for $13.35 million last week by a joint venture comprising July Residential Group and New York City’s Matador Capital Management, according to Feldman Ruel, which brokered the sale on behalf of seller Willard Holdings VI LLC, an affiliate of Chevy Chase's Forbright Bank.

The building, with 36 units, delivered in March 2024, but just seven months later the affiliate of lender Forbright Bank acquired the property at a foreclosure auction for $12.4 million. Feldman Ruel started marketing the property for sale late last year, offering it up for $13.9 million, or $8 million below the cost of construction.

The buyer plans to lease up the property, located a block from the Takoma Metro station, and operate it as apartments, rather than for-sale condos as it was developed to accommodate.

“With the dislocation that there is in the market, you get some really unique opportunities like this one to acquire a very high quality property, newly built … in a transit-oriented neighborhood at a very, very low basis,” July Residential Group Managing Partner Isaac Pinto said in an interview.

Pinto said he believed it would be difficult and time consuming to sell the units as condos. He was also concerned the units weren’t finished to a high enough standard to be sold as premium condos.

In addition to its residential units — 24 one-bedroom and 12 two-bedroom — the sale also included the property’s four retail spaces totaling 8,365 square feet. Pinto said they’re in “very serious” talks with a small-scale grocer tenant to potentially take the entire retail space. Another potential grocer tenant also recently started showing interest in the space, he said.

The Arbor was originally acquired and developed for $21.9 million by the Neighborhood Development Co. (NDC), a longtime D.C. developer behind a host of mixed-income projects. NDC ceased operations in September, shortly after losing the property in the the foreclosure sale.

In shuttering, NDC cited “untenable” market conditions, most notably a pandemic-era law that made it more difficult for landlords to evict tenants who fell behind on their rent. NDC's comments and similar complaints from other multifamily developers prompted D.C. leaders to recently pass eviction reforms to address what had been called a rent delinquency crisis and make it easier for landlords to evict tenants.

Matador Capital notes on its website that it seeks out “poorly managed and undercapitalized assets which we stabilize and improve through our rigorous asset management program.” The Arbor acquisition is its first in the D.C. region.

“It was a very opportunistic purchase, because the developer got himself in some trouble, not necessarily in this building, but in some other buildings, and really couldn't finish the job,” Matador Managing Principal Larry Bank said in an interview. Now, he added, “I have the best product at the lowest basis."

Its partner in the acquisition, July Residential Group, with offices in D.C., New York and Boca Raton, touts having acquired, developed and managed a $2 billion portfolio containing more than 12,000 units, according to its website.

Josh Feldman, Chris Chadwick, and Hannah McCann of Feldman Ruel represented the seller in the transaction.