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Eight-figure flip: Newly built West Creek apartment complex fetches $103 million

October 29, 2019

October 28, 2019
In its biggest deal to date and the region’s largest price tag in the last 12 months, an Innsbrook-based real estate firm just dropped nine figures for a year-old apartment complex in Goochland County.

The 373-unit 2000 West Creek apartment community at 2000 Broad Branch Circle in the West Creek Business Park sold last week to Henrico’s Capital Square 1031 for $103 million.

Capital Square CEO Louis Rogers said the firm closed on the transaction Oct. 24 after putting the property under contract about two months ago.

Tennessee-based Bristol Development Group was the seller. The company spent around $50 million to develop the site, after paying around $3 million to purchase the 22 acres from Bill Goodwin’s Riverstone Properties in January 2016. It opened to residents about a year ago.

It’s the largest apartment transaction ever in Goochland County and the largest year-to-date in metro Richmond, fetching around $277,000 per door. It also marks a milestone for Capital Square, which pools money from investors through 1031 exchanges to buy commercial real estate around the country.

“This is our largest transaction ever,” Rogers said. “As far as apartments are concerned, this is a class A-plus community that was recently awarded ‘Community of the Year’ by the Virginia Apartment Management Association … We couldn’t be more pleased with this latest investment.”

Capital Square closed the deal by financing 58 percent of the acquisition through a seven-year, 3.47 percent fixed-rate loan provided by PNC Bank, Rogers said.

The firm will then look to raise about $48 million in additional equity for the property from 1031 investors, who will then own a share of the property and share in any profits. Capital Square takes a fee for its efforts.

Charles Wentworth, Will Mathews, G.S. “Hank” Hankins, Rawles Wilcox, Victoria Pickett, Clay Ellis and Garrison Gore of Colliers International represented Bristol Development in the deal. Alexandra Huffman, Justin Nelson and Lynn Pearson of Maryland-based commercial real estate brokerage Walker & Dunlop represented Capital Square.

Bristol Development launched construction on 2000 West Creek in late 2017, with work wrapping up around early summer 2018.

The complex includes 176 one-bedroom units and 197 two-bedroom apartments, which are more than 90 percent occupied, Rogers said. Amenities include a heated saltwater pool, fitness center, fire pit, grilling stations, dog park, pet spa and media lounge.

The development is surrounded by several employment, entertainment and retail hubs, including Capital One’s Richmond headquarters, Hardywood Park Craft Brewery, Drive Shack and access to Short Pump Town Center in Henrico.

Given that location, Rogers said Capital Square liked the deal because of the rents that 2000 West Creek can fetch from residents.

“The forecast for rental growth in that area is very high, and we suspect that it’s only going to increase as demand for high-quality apartment units increase in the area,” Rogers said. “There’s 3.4 percent projected rent growth over the next five years, and a strong employment base that’s expected to be in place.”

2000 West Creek’s floor plans range from 774 to 1,246 square feet. Rent begins at around $1,450 a month.

Capital Square now has invested more than $600 million to acquire dozens of properties nationwide, from apartments to medical office buildings. It owns at least five other apartment communities in metro Richmond: Perry Place in Manchester; Mayton Transfer Lofts in Petersburg; Maple Springs and Hickory Creek, both in Henrico; and Axis 147 in Chesterfield.

While it remains an acquirer, the company also is becoming a developer, starting in one of Richmond’s hottest neighborhoods.

In July, the firm paid $1.6 million for a half-acre site at 2900 and 2904 W. Clay St. in Scott’s Addition, where it plans to construct a five-story, 60-unit apartment building, which is the first step in its planned $90 million Scott’s Collection development.

The second piece of that collection came in September, when the company purchased 3000 W. Clay St. for $750,000. Next it will buy 3008 W. Clay St. and use both parcels to construct a five-story, 80-unit apartment building.

For the third phase of Scott’s Collection, Rogers said the firm is set to purchase 2911 W. Moore St. sometime next year, where the existing warehouse building will be replaced with an 11-story, 250-unit apartment building. It would be the tallest building in the neighborhood.

Bristol Development, meanwhile, still has its hands full in Richmond. The firm continues construction on the $55 million Canopy at Ginter Park project, a 300-unit apartment complex being built on part of the former Westwood Tract, a previously vacant seminary-owned site at Brook Road and Westwood Avenue in the city’s Northside.


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