One of the highest-profile names in national real estate and politics is making its first push into the Richmond market.
Kushner Cos., the real estate company of President Donald Trump’s son-in-law and senior adviser Jared Kushner, is under contract to purchase two apartment properties in Chesterfield County for a combined $98 million.
The purchases – the New York-based company’s first in the Richmond market – include The Park at Salisbury apartments in Midlothian and the Garden Springs gated complex near Chester. The deal is scheduled to close June 27.
The seller is Midlothian-based Ronald C. Evans & Associates, which developed both properties and managed them through its R.C. Management Group. Kushner’s Westminster Management will take over management of both properties upon closing.
“Kushner Companies is excited about the acquisition of 532 apartments in Richmond at Park at Salisbury and Garden Springs,” the company said in a statement. “These are quality assets that the company will continue to improve and enhance. We anticipate this to be the first of many transactions in the region.”
Owner and President Ron Evans said his firm received more than 100 offers from prospective buyers around the world for the two properties and a third that was marketed with them. The third property, a 216-unit complex in Lynchburg called The Overlook at Stonemill, is set to sell June 25 for $22.22 million to an entity tied to Castle Lanterra Properties, a New York-based investment group unaffiliated with Kushner.
Evans listed the three properties with Newmark Knight Frank, with local representation from Mike Marshall, Drew White, Wink Ewing and Carter Wood.
Much interest in properties
Since hitting the market in January, Evans said the properties attracted more than 60 tours in two months before the deal was made with Kushner, which Evans said had been looking to get in on the Richmond market.
“The Kushner group has been looking to get into Virginia, specifically into Richmond, because of the growth and the solidity; the economic base here is very diversified,” Evans said. “Richmond, Virginia, is starting to fold in many more outside institutional and private investors, and I think the Kushner purchase of these properties is an example of that.”
While he said he’s not planning to unload his other apartment properties, Evans said market conditions were right for selling these three.
“The very high price-per-unit values that we were already starting to see in the marketplace and the bottoming out of interest rates being down at historic lows has made cap rates historically low,” Evans said. “It was a good time to take advantage of proven multifamily asset values combined with historically low cap rates.”
Last year, Evans sold the 218-unit Ashland Towne Square apartments to out-of-town buyers for $27.25 million. His local portfolio now includes Cross Creek in North Chesterfield, Charter Creek in Ashland, Charleston Ridge and Mill Trace Village in Mechanicsville, and Woodmere in Petersburg.
“We’re holding on to the rest of our properties and continue to look to grow the portfolio through additional development opportunities,” said Evans, whose company also manages Cambridge Square, a Mechanicsville complex developed by Larry Shaia, who also developed Charleston Ridge.
Evans said the Kushner purchase price breaks down to $60.5 million for The Park at Salisbury and $37.5 million for Garden Springs. The latest county assessment valued the properties respectively at $43.7 million and $29.9 million.
The purchase was facilitated with a $64 million Freddie Mac loan arranged by Newmark Knight Frank.
Built in 2004, the 320-unit Park at Salisbury fills 44 acres at 401 Lancaster Gate Drive, northeast of the Route 288-Midlothian Turnpike interchange and across 288 from Westchester Commons.
Garden Springs, built in 2009, totals 212 units and spans 21 acres at 10801 Dylans Walk Road, off Ironbridge Boulevard southeast of Iron Bridge and Centralia roads.
The two properties combined were 97 percent occupied in May, according to an announcement posted on securitization business website Asset-Backed Alert. The announcement said the initial yield for Kushner is projected at 5.5 percent.
The deal comes on the heels of a $1.1 billion portfolio purchase Kushner completed last month for 6,000 apartments in Virginia and Maryland from private equity firm Lone Star Funds.
According to its website, Kushner had $4.34 billion in transactions in 2018, expanding its multifamily portfolio and launching a hotel division. Westminster Management owns and manages over 20,000 garden-style apartments in five states, including New York, New Jersey, Maryland, Pennsylvania and Ohio.