Wave of Chesterfield apartment deals continues with $ 55 million sale

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The Meridian Watermark Apartments at 6500 Caymus Way. (Photos courtesy of NorthMarq)

Add 300 more apartments to the wave of multi-family real estate deals that has come to a close in 2020 in Chesterfield County.

The Meridian Watermark Apartments at 6500 Caymus Way were sold on December 22 for a total of $ 54.8 million. The transaction was part of a $ 167 million portfolio sale that included four properties in Hampton Roads.

The buyer, Maryland-based Capreit, shelled out $ 53.3 million for the 300-unit complex, located off Iron Bridge Road, northeast of the Chesterfield County Airport. The remainder of the purchase price represented the personal assets included in the sale, said Mike Marshall, who led the NorthMarq team that negotiated the sale of the portfolio off-market.

The county’s latest valuation valued the 16-acre property at $ 37.49 million.

The seller was Waverton Associates, a Portsmouth-based developer who built Meridian Watermark in 2011. The company is also building a 230-unit complex in the neighboring Austin Woods development.

The 12-acre apartment complex was built in 2011.

Marshall said Capreit was identified as a potential buyer when Waverton, a longtime NorthMarq client, sought to offload the properties, each of which required loan assumptions from Virginia Housing, formerly the Virginia Housing Development Authority.

“One of the reasons we thought they would be candidates is that they are currently borrowers from VHDA,” Marshall said of Capreit. “They met many criteria to close the deal and get the loans taken care of.”

Headquartered in Rockville, Capreit owns and manages more than 60 apartment properties across the country, including 14 in Virginia, including six in the Richmond area. Its local holdings include two other properties in Chesterfield: Atlantic at Charter Colony and Creekpointe. It also owns The Glenn’s at Millers Lane, Overlook at Brook Run and Atlantic at Twin Hickory apartments in Henrico County.

At 300 units, the total sale price of Meridian Watermark is $ 182,666 per door. Marshall said work on the transaction began in September and was completed “in record time” for a loan assumption deal, with the fifth of the portfolio’s five properties scheduled to close next week.

He said Meridian Watermark units average around 1,000 square feet and have a monthly rent of $ 1,300. The occupancy rate was 98% at closing, he said.

Marshall said Capreit would likely improve the property at some point, but could not give details. Attempts to reach Capreit for comment were unsuccessful on Monday.

The 300-unit complex was 98% occupied at closing.

Marshall worked with his colleagues at NorthMarq, Wink Ewing, Ryan Rilee and Keith Wells. Formerly at Newmark Knight Frank, Marshall and Ewing joined NorthMarq last year with Rilee, who came from One South Commercial. They manage investment sales for the NorthMarq office in Richmond, which Wells has opened and has been running since 2013.

Meridian Watermark has closed a series of apartment deals that have passed through Chesterfield in the final months of 2020. A week earlier, the 296 Belvedere apartments near Bellgrade sold for $ 67.4 million. This followed the sale of the 151-unit Broadwater Townhouses and 121-unit Bristol Village to Charter Colony, which sold for $ 37 million and $ 16.8 million, respectively.

In November, the 102 Genito Glen apartments sold for $ 14.4 million, while the 266 Courthouse Green Townhomes units sold for $ 33.8 million, in a deal Ewing helped to be negotiated while remaining with Newmark Knight Frank.

Marshall attributed the increase in transactions to pent-up demand resulting from the pandemic and economic downturn, as well as interest rates that have remained below 3% for much of last year. The fact that these transactions all took place in Chesterfield, he said, is likely related to product availability.

“2020 has been the strangest year I have ever seen,” Marshall said. “You had a period in the middle of the year when things slowed down considerably, from a transaction perspective, and we weren’t sure exactly what was going to happen in terms of operational performance, because of the virus.

“What we found is that over the year, despite all the bad things, the apartment market, particularly in Virginia, has held up better than expected,” he said. “The properties were doing better than we probably thought, so you had all this demand for doing business in 2020 from an investment perspective that was largely suspended for five or six months.”

Marshall said activity picked up in the third quarter, leading to more deals being closed by the end of the year – a trend he sees continuing through 2021.

“This pipeline was almost frozen for a while, and as conditions improved, deals started to be made. And I think you’re going to see him in the first quarter, ”he said. “I think you’ll see a lot of things to sell in the first quarter. It’s generally true anyway, but I think this year could be even more so.

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