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August 10, 2023

Grafton Hill apartment building rises 138% in value over six years amid high demand

Photo | Courtesy of Google Maps A seven-unit apartment building on Grafton Hill traded for more than $1 million.

Less than a year after purchasing a seven-unit apartment building on Worcester’s Grafton Hill, an Auburn investor turned the building around for a nearly 20% profit.

Byrnes Investment Group of Auburn sold the building at 5-9 Palm St. for $1.07 million on Friday, after purchasing it from AFM Realty Trust of Dudley for $894,000 in November, according to the Worcester District Registry of Deeds.

AFM purchased the same property in 2017 for $450,000, meaning the property’s sales price went up by $620,000 in six years.

The buyer on Friday was 5 Palm LLC of Worcester, which lists Menachem Liberow of Worcester as its manager in a filing with the Massachusetts Secretary of the Commonwealth.

Byrnes Investment owner Michael Byrnes said he usually invests in communities outside of Worcester like Webster or Dudley, but that he saw value in this property and invested in it. Agents Ben Carbone and Brooke Coughlin of Byrnes Real Estate Group in Auburn, of which Michael Byrnes is CEO, approached him earlier in the year saying they could resell the building for a profit, and he gave them the go ahead to list it.

Byrnes, who grew up in Dudley and graduated from Nichols College in Dudley, purchased a 10-property multifamily portfolio in Webster in March for $3.5 million.

The vacancy rate for rental units in Worcester is estimated to be 4.3% in the second quarter of 2023 compared with 6.3% nationally, according to the U.S. Census Bureau. That number varies from quarter to quarter and was at 1.7% for Worcester in the first quarter. 

The shortage of rental properties has driven up rents in the area dramatically, leading to a household needing to bring in more than $65,000 a year to afford a two-bedroom apartment in the city, according to the Central Massachusetts Housing Alliance, a Worcester-based housing advocacy group.

Developers have permitted thousands of new apartments in Worcester to meet the demand for more housing. Most of these are market-rate apartments, and housing advocates demand more affordable units be built to address the needs of lower-income families.

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