Elme Communities Reaches $250 Million Deal to Sell Last Property
After a transaction termination in June, Elme Communities quickly reached a new agreement with FPA Multifamily to sell its last major property for $250 million, with the transaction expected to close no later than September 14, 2026.
On June 17, Elme Communities' liquidation process hit a snag: The Beitel Group terminated the purchase agreement to acquire Riverside Apartments (1,222 units) and related undeveloped land in Alexandria, Virginia, for $280 million. According to a filing submitted to the U.S. Securities and Exchange Commission (SEC) on June 24, this termination scuttled the planned transaction.
However, the Bethesda, Maryland-based real estate investment trust (REIT) quickly adjusted its strategy. On July 23, Elme announced that its subsidiary had signed a contract with FPA Multifamily LLC to sell the large apartment community and undeveloped land for $250 million—a price $30 million lower than the amount in the terminated agreement. Another SEC filing submitted the same day confirmed the transaction.
Under the agreement, FPA Multifamily must pay a total of $4 million in earnest money, with the first $2 million due within one business day of signing. The San Francisco-based private investment firm must pay the remaining $2 million within one business day after the inspection period (ending August 20, 2026, unless extended) expires, unless it terminates the agreement before then. The transaction closing date is no later than September 14, 2026, subject to limited exceptions. The filing shows that FPA Multifamily has previously purchased four other properties from Elme.
Additionally, Elme agreed to sell Elme Bethesda, a 193-unit property, to CAPREIT for $59 million, based on a May 27 SEC filing. The inspection period was extended to June 4, and then, according to a June 24 filing, the purchase price was reduced to $58 million. On July 23, after obtaining a compliance certificate from Montgomery County's Department of Housing and Community Affairs (confirming the property complies with Montgomery County's right-of-first-refusal requirements), Elme amended the agreement with CAPREIT's assignee, Tilden Bethesda Hill Apartments LLC, setting the closing date no later than August 11, 2026.
Elme's asset sales began last year. After launching a "formal evaluation of strategic alternatives" in February 2025, the company sold 19 properties to affiliates of Cortland Partners, an Atlanta-based investment, development, and management firm, for $1.6 billion in cash in November of last year. As of July 24, following the Cortland transaction, Elme had sold six of its remaining ten properties (per a June 23 filing). The company has signed sale agreements for the remaining four properties, three of which are no longer in an ongoing inspection period. These sales are expected to generate approximately $418 million in total gross proceeds.
Elme completed the sale of Elme Watkins Mill (210 units) in Gaithersburg, Maryland, on June 10, to RailField Partners. Jon Siegel, co-founder and chief investment officer of RailField, told Multifamily Dive in emailed comments: "Buying a property from a liquidating REIT is a bit different from a typical transaction because their motivations are different from others." But he said the collaboration with Elme ultimately went smoothly.
Siegel added: "We were concerned they might have checked out on property management and that no one would answer the phone on the other end during the transaction, but it turned out Elme's management was strong, and the team we worked with was very responsive and professional."
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