The major apartment owner and operator acquired a five-community apartment portfolio in the Richmond area, with plans to keep the units affordable.
Overlook at Brook Run, one of the properties CAPREIT acquired in the Richmond-area multifamily portfolio.
Richmond, Va.—Major apartment owner CAPREIT is growing even bigger with its latest acquisition of five apartment communities in the Richmond area for $68.5 million. Totaling 978 units, the properties are located in Richmond, Midlothian, Petersburg and Williamsburg.
The company owns and manages several hundred units in the Richmond metro area, which was one of several reasons this acquisition made sense, Andrew Kadish, president of CAPREIT, told MHN. “The addition of close to 1,000 units will significantly increase operating efficiencies for the company within the region,” he said. Another reason for the purchase was “the relatively recent vintage of the portfolio [from 2000 or more recent]” which means “new owners will not have to spend as much capital on mechanical systems, roofs, or other items that will not drive NOI.”
CAPREIT’s goal is for these communities to remain affordable for middle-class families, so the company isn’t completing any major renovations. However, the company will make some exterior and interior upgrades that will bring the total acquisition cost closer to $72 million.
Since the firm was founded in 1993, it has acquired both market rate and affordable multifamily units, both of which provide “significant financial yields,” Kadish said.
“Our hope with this acquisition is to help the State of Virginia preserve affordable housing for its police officers, firefighters, teachers, nurses and all other members of the middle class,” said Rick Band, a senior vice president of CAPREIT. “The apartment industry in Virginia, like many in the nation, is booming, resulting in the renovation of many apartment communities into Class A assets. But middle-class families, who can’t afford luxury rents, still need a reputable home that won’t price them out of the city. These communities do just that, and we intend to keep it that way.”
The communities were previously managed by Landmark Property Services. They all offer two- and three-bedroom units with two full bathrooms, as well as a pool and a fitness center.
The apartment portfolio includes: Overlook at Brook Run (282 apartments) and The Glenns at Miller Lane (144), both of which are transit-based communities in the Henrico area of Richmond, with access to Virginia’s business centers; Creekpointe (214), located in Midlothian and just north of the 5.2 billion-gallon Swift Creek Reservoir; Lieutenants Run (168), located in Petersburg and minutes from Fort Lee and I-95; and Longhill Grove (170), located 7 miles from Colonial Williamsburg and minutes from I-64, the state’s main east-west corridor.
CAPREIT focuses on acquiring properties in secondary and tertiary markets that don’t experience the “pricing extremes that exist in core markets,” Kadish said. He added that Richmond is one example of a secondary market with strong demographics in which CAPREIT has “reaped financial rewards due to its targeted investments.”
With this acquisition, CAPREIT owns and operates about 14,000 apartment residences in the United States, valued at more than $5 billion.