An out-of-town buyer has marked its entry into the local real estate market with an eight-figure purchase in western Henrico County.
Washington, D.C.-based StoneBridge Investments purchased the 366-unit Copper Spring apartments for $54.2 million in a transaction that closed Thursday.
The seller was Copper Springs LLC, an affiliate of New York-based Clarion Partners that purchased the property in 2011 for $36 million. The latest county assessment valued the property at $38 million.
Copper Springs LLC was represented in the deal by Eastdil Secured, a Richmond-based real estate investment banking firm.
The purchase is the first in metro Richmond for StoneBridge, a 37-year-old company that invests primarily in multifamily properties. The firm, which has offices in D.C. and Amsterdam, works exclusively with investors in the Netherlands and has acquired and developed more than $1.7 billion in real estate in the D.C.-Baltimore area, the Carolinas, Georgia, Florida and Texas.
Managing director Kees Bruggen said StoneBridge had been eyeing Richmond for several years, initially looking for a smaller urban project downtown before its attention moved toward Short Pump.
“We liked the fundamentals of the market – maybe not as flamboyant as some other markets in the United States, but very solid, especially in the Henrico County submarket,” Bruggen said. “The Short Pump retail that has been developed over years – we liked the overall demographics.”
Built in 1989 and renovated in 2006, the 30-acre Copper Spring property consists of 23 two- and three-story buildings and an unused 1.25-acre parcel that is available for development. Located at 3301 Copper Mill Trace, the property straddles Mayland Drive between Tuckernuck Drive and Pemberton Road, east of Gaskins Road and between Interstate 64 and West Broad Street.
Units range from 700 square feet for a one-bedroom, one-bathroom floor plan to 1,100 square feet for a two-bedroom, two-bath. Apartments include wood-burning fireplaces, balconies or patios, walk-in closets, exterior storage and washers and dryers.
Monthly rents range from $980 for a one-bedroom unit to $1,280 for a larger two-bedroom. Amenities include two swimming pools, Wi-Fi, a fitness center, a business center, lighted tennis court, racquetball court, shuffleboard and playground.
Bruggen said StoneBridge does not plan to adjust rents. Stonebridge affiliate ZRS Management will manage the property.
“The submarket has seen slow organic growth, so we’re not underwriting some aggressive rent increases for this property,” Bruggen said. “We see it as a fairly low-risk, and maybe also low-return, investment for cash in the bank.”
Bruggen said StoneBridge is planning upgrades to the pool and grilling areas, new furniture and painting for the clubhouse, an expanded fitness center, painting and landscaping, and “limited” renovations to units over time with hard-surface flooring, lighting and stainless steel appliances.
Bruggen said Copper Spring is the first of more investments for StoneBridge in and around Richmond.
“We think it’s a solid market. We think you get a little bit extra return in that Richmond submarket, which is always nice,” he said. “It’s a little bit less volatile than some other markets.”
The Copper Spring purchase is one of the priciest local apartment deals in recent memory, surpassing the 340-unit Wellesley Terrace apartments that sold in July for $51.12 million.
It’s also the latest 1980s-era apartment property to sell to new owners in that part of Henrico, particularly along the multifamily-heavy Mayland Drive corridor.
Last year, Henrico-based McCann Realty Partners purchased the 32-year-old Hickory Creek apartments along Tuckernuck Drive for $28.55 million, while a California firm paid $23.32 million for the Champions Club apartments near Gaskins and Springfield roads and $28.5 million for the Park West End apartments on Glenside Drive.