Out-of-town investors scoop up Henrico apartments

millspring commons

The Millspring Commons apartments at 9318 Tarheel Terrace sold for $20 million. (CBRE)

A pair of Henrico apartment properties traded hands in recent weeks, both in eight-figure deals to out-of-town buyers.

The biggest price tag among the two was the 159-unit Millspring Commons apartments at 9318 Tarheel Terrace, at the intersection of Staples Mill and Hungary Spring roads, which sold Nov. 15 for $20.6 million.

County property records list the buyer as an entity tied to New York-based Aurelie Capital, a recently launched real estate private equity firm. Managing principal Pavan Malhotra said the purchase is Aurelie’s first transaction.

The seller was an entity controlled by Florida-based Electra America, which purchased the 16-acre property in June 2016 for $18.18 million as part of a 12-property portfolio.

CBRE represented Electra in the transaction. CBRE | Richmond’s Charles Wentworth and Peyton Cox worked the deal locally, along with Jonathan Greenberg and Bob Dean of CBRE’s Washington, D.C.-based multifamily investment properties group.

Built in 1972, Millspring Commons consists of one-, two- and three-bedroom apartments ranging from 700 to 1,230 square feet. Monthly rents range from $995 to $1,455, according to its website. Occupancy was at 97 percent at the time of the sale, according to CBRE.

Amenities include a fitness center and a pool. The site is managed by Hampton Roads-based Drucker & Falk. A county assessment most recently valued the property at $15.95 million.

The deal came one week before another big closing for Wentworth and Cox: the $45.83 million sale of Oxygen at Centerpointe, a 255-unit complex in Chesterfield County.

Aurelie Capital plans to invest $2 million in capital improvements to the property, continuing renovations started by the seller. Plans include upgrades to unit interiors with new appliances, cabinets, flooring, stone counter tops, and bathroom and kitchen fixtures. The pool area and clubhouse are also slated for renovation.

A few miles west near Chamberlayne Avenue, the 292-unit Village at the Arbors at 5613 Crenshaw Road sold Dec. 27 in an off-market sale totaling $17.16 million.

The buyer was Bethesda, Maryland-based RailField Realty Partners, making its second Richmond-area purchase after entering the local market last year. The 3-year-old firm, made up of former Fannie Mae execs, purchased the 266-unit Courthouse Green complex in Chester for $25.3 million in August.

village at the arbors clubhouse

The Village at the Arbors apartments sold for $17 million. (RailField)

The seller was Brook Hill Partners LLC, an entity tied to Emet Capital Management, a New York-based investment fund. Emet purchased the property in a forced sale in 2013 for $11.68 million, according to county records.

Built in 1965, Village at the Arbors consists of one-, two- and three-bedroom units that average 943 square feet. Monthly rents average just over $700.

The latest county assessment valued the 23-acre property at $10.28 million.

RailField principal Jon Siegel said the firm plans to invest $2.3 million in upgrades to common areas and units, including roof replacements, parking enhancements, landscaping, exterior painting, and upgrades to most units spanning a couple years.

Siegel said the property was appealing for the firm’s second purchase in the market.

“This one is an older property, but it’s got an infill location and is very stable,” he said. “There isn’t any new construction around it. The property over the last year has been 95 percent-plus occupied. We think it’s got a good combination of stable cash flow and upside with it as well.”

Since its entry into Richmond last year, Siegel said, RailField has expanded its multifamily portfolio in Austin, Texas, and is eyeing more acquisitions in other markets, including here.

RailField’s purchase adds to other investment along the Chamberlayne Avenue corridor north of Richmond. Local developer Genesis Properties is in the midst of a $15 million rehab of the 1940s-era Bellevue Apartments between North and Westminster avenues.

Note: This story has been updated to include information on planned improvements to Millspring Commons received after deadline from Aurelie Capital.

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Bruce Milam

Genesis’ redevelopment of of Bellevue is very important on the Chamberlayne corridor. That road needs a breath of fresh air and those old buildings were in sore need of renovation. Genesis is doing this as a bond deal to return the units to the workforce market.