Two local apartment complexes have changed hands in a deal that also includes a Newport News property.
Lerner Enterprises in recent weeks sold its Wilde Lake Apartments, Hanover Crossing Apartments and Chesapeake Bay Apartments properties to Drucker & Falk, a real estate company with offices whose Virginia offices are located in Richmond and Newport News, and LEM Capital, a Philadelphia-based private equity firm.
“We thought we could come in and improve operations while reducing costs at these properties,” said Jim Ledbetter, President and COO of Drucker & Falk.
Lerner initially acquired Wilde Lake Apartments in Richmond’s West End in 2004 from Equity Residential. The 190-unit complex, located at 2900 Bywater Dr., was built in 1989. The acquisition was Lerner’s second in the area after the 220-unit Hanover Crossing Apartments. That complex is located at 9528 Hanover Crossing Dr. in Mechanicsville.
Henrico County’s Real Estate Assessment Division lists the sale price for Wilde Lake Apartments at $20.93 million. Hanover County shows Hanover Crossing Apartments sold for $22.79 million.
LEM Capital provided the majority of the equity in the deal. It was the first time the firm had partnered with Drucker & Falk.
“When you can find properties that have not been renovated and have potential, that’s what investors are looking for,” said Lisa Brewer, a business development director with Drucker & Falk.
Ledbetter said his firm would enhance the properties improving clubhouses, replacing exterior siding and remodeling kitchens.
“We hope that, by improving the livability and viability of the properties, current tenants will be more likely to renew their leases and create a greater demand,” Ledbetter said, adding that this strategy will allow Drucker & Falk to raise rent prices.
The sale of the properties marks a departure by Lerner Enterprises’s from the Richmond residential market. Its remaining residential properties are in the Washington-metro area. Headquartered in Rockville, Maryland, Lerner Enterprises was founded by Washington Nationals owner Ted Lerner.
“They weren’t departing the markets because they had any problems with them,” said Andy Boyer, a broker with CBRE’s Washington, D.C., who worked the deal. “They did what they wanted to with the properties and sold them when the time was right.”
Dan Johnson of CBRE|Hampton Roads and Charles Wentworth of CBRE|Richmond handled the deal along with Boyer.