An aerial shot shows the outlined Crystal Lakes Apartments. (Courtesy of Levco Management)
In its biggest deal to date, a local real estate firm that’s been shifting its focus toward larger-sized apartment properties has picked up a sizable complex in Chesterfield — paying nearly four times what it last sold for four years ago.
Richmond-based Levco Management purchased the 716-unit Crystal Lakes Apartments at 3501 Meadowdale Blvd. for $106 million in a deal that closed Dec. 9. The purchase price equates to just over $148,000 per door.
The 80-acre property, in the eastern part of the county, is off Chippenham Parkway just west of the Route 1 interchange.
Max Comess
The purchase is the largest to date for Levco, which has been turning from smaller-sized properties in and around Richmond to larger garden-style apartments in places like Hampton Roads. The deal brings Crystal Lakes back under local ownership for the first time in 20 years, Levco Managing Partner Max Comess said.
The seller was New York City-based Emet Capital Management, which bought Crystal Lakes for $37.5 million in 2017, when it was marketed as one of the largest distressed rental communities in the Richmond market.
About half of the units were occupied at the time, and the rest were unrentable without significant improvements, which came in the form of about $25 million that Emet Capital put into the property. Levco Managing Partner Jared Levin said that investment factored into the purchase price.
Jared Levin
“A significant amount of work went in just to get all of the units online,” Levin said, adding that all of the units were operable and leased when Crystal Lakes hit the market over the summer. “Our opportunity now is to come in and take this to the next level, to really execute here and create a much better property.”
Levco plans to put another $16.5 million into the property over the next several years, with renovations over the first three years to 386 units. The rest of the units had been renovated by Emet but will also be enhanced with Levco’s preferred finishes.
Planned upgrades to units include new cabinetry, granite countertops, stainless steel appliances and light fixtures. The company also is planning a multimillion-dollar landscaping enhancement, Levin said.
When the property was brought to market over the summer, it had 98 percent occupancy, with an average market rent of just over $1,000 for an average unit size of 966 square feet, according to a flier. The complex consists of 94 buildings totaling 691,000 square feet of rentable square-footage.
The 94-building Crystal Lakes complex totals 716 units. (Photos courtesy of Cushman & Wakefield)
The apartments were built between 1967 and 1973. The property most recently was assessed by Chesterfield County at $26.64 million.
Cushman & Wakefield’s D.C. office handled the listing for Emet Capital, having brokered its purchase on behalf of the previous owner, California-based Latitude Real Estate Investors. Brokers Jorge Rosa and Anthony “T.J.” Liberto were involved in both deals, working this latest one with C&W colleagues Matthew Collins and Brad Geiger.
Levco’s purchase follows a string of deals for the company in recent months. In October, it paid $27.2 million for the 157-unit Gallery Midtown apartments in the Museum District. And in August, it unloaded the downtown Morton’s Apartments, selling the 23-unit property for $3.22 million.
The deals follow Levco’s closing in July on a $60 million private equity fund, the firm’s first. Comess said the fund has allowed the firm to pursue a more diverse set of properties than it was able to before.
The 80-acre complex is centered around two lakes.
“This is really a good example of the type of properties we want to do going forward,” Comess said, referring to both Crystal Lakes and Gallery Midtown. “Having that discretionary fund allows us to move quickly and pursue larger properties, and smaller properties. It really arms us to be more competitive in the marketplace today.”
Noting the nine-figure deal for Crystal Lakes, Comess predicted such deals are going to become more commonplace in the Richmond market in the years ahead.
“I think in a lot of ways Crystal Lakes is a harbinger of the types of deals we will see over the next few years – these larger, check-size deals, nine-figures and so forth,” he said. “Richmond definitely has more global appeal than it ever has before.
“This year, Richmond will see in excess of $1 billion in multifamily sales, which is really a key metric that a lot of institutional investors look at, because they typically don’t want to invest in markets where there’s perceived to be a shortage of liquidity,” Comess said. “With deals like Crystal Lakes, these nine-figure deals are not as rare as they used to be, and it only will accelerate the amount of interest from out-of-town firms.”
Note: This story has been updated with corrected quote attributions.
An aerial shot shows the outlined Crystal Lakes Apartments. (Courtesy of Levco Management)
In its biggest deal to date, a local real estate firm that’s been shifting its focus toward larger-sized apartment properties has picked up a sizable complex in Chesterfield — paying nearly four times what it last sold for four years ago.
Richmond-based Levco Management purchased the 716-unit Crystal Lakes Apartments at 3501 Meadowdale Blvd. for $106 million in a deal that closed Dec. 9. The purchase price equates to just over $148,000 per door.
The 80-acre property, in the eastern part of the county, is off Chippenham Parkway just west of the Route 1 interchange.
Max Comess
The purchase is the largest to date for Levco, which has been turning from smaller-sized properties in and around Richmond to larger garden-style apartments in places like Hampton Roads. The deal brings Crystal Lakes back under local ownership for the first time in 20 years, Levco Managing Partner Max Comess said.
The seller was New York City-based Emet Capital Management, which bought Crystal Lakes for $37.5 million in 2017, when it was marketed as one of the largest distressed rental communities in the Richmond market.
About half of the units were occupied at the time, and the rest were unrentable without significant improvements, which came in the form of about $25 million that Emet Capital put into the property. Levco Managing Partner Jared Levin said that investment factored into the purchase price.
Jared Levin
“A significant amount of work went in just to get all of the units online,” Levin said, adding that all of the units were operable and leased when Crystal Lakes hit the market over the summer. “Our opportunity now is to come in and take this to the next level, to really execute here and create a much better property.”
Levco plans to put another $16.5 million into the property over the next several years, with renovations over the first three years to 386 units. The rest of the units had been renovated by Emet but will also be enhanced with Levco’s preferred finishes.
Planned upgrades to units include new cabinetry, granite countertops, stainless steel appliances and light fixtures. The company also is planning a multimillion-dollar landscaping enhancement, Levin said.
When the property was brought to market over the summer, it had 98 percent occupancy, with an average market rent of just over $1,000 for an average unit size of 966 square feet, according to a flier. The complex consists of 94 buildings totaling 691,000 square feet of rentable square-footage.
The 94-building Crystal Lakes complex totals 716 units. (Photos courtesy of Cushman & Wakefield)
The apartments were built between 1967 and 1973. The property most recently was assessed by Chesterfield County at $26.64 million.
Cushman & Wakefield’s D.C. office handled the listing for Emet Capital, having brokered its purchase on behalf of the previous owner, California-based Latitude Real Estate Investors. Brokers Jorge Rosa and Anthony “T.J.” Liberto were involved in both deals, working this latest one with C&W colleagues Matthew Collins and Brad Geiger.
Levco’s purchase follows a string of deals for the company in recent months. In October, it paid $27.2 million for the 157-unit Gallery Midtown apartments in the Museum District. And in August, it unloaded the downtown Morton’s Apartments, selling the 23-unit property for $3.22 million.
The deals follow Levco’s closing in July on a $60 million private equity fund, the firm’s first. Comess said the fund has allowed the firm to pursue a more diverse set of properties than it was able to before.
The 80-acre complex is centered around two lakes.
“This is really a good example of the type of properties we want to do going forward,” Comess said, referring to both Crystal Lakes and Gallery Midtown. “Having that discretionary fund allows us to move quickly and pursue larger properties, and smaller properties. It really arms us to be more competitive in the marketplace today.”
Noting the nine-figure deal for Crystal Lakes, Comess predicted such deals are going to become more commonplace in the Richmond market in the years ahead.
“I think in a lot of ways Crystal Lakes is a harbinger of the types of deals we will see over the next few years – these larger, check-size deals, nine-figures and so forth,” he said. “Richmond definitely has more global appeal than it ever has before.
“This year, Richmond will see in excess of $1 billion in multifamily sales, which is really a key metric that a lot of institutional investors look at, because they typically don’t want to invest in markets where there’s perceived to be a shortage of liquidity,” Comess said. “With deals like Crystal Lakes, these nine-figure deals are not as rare as they used to be, and it only will accelerate the amount of interest from out-of-town firms.”
Note: This story has been updated with corrected quote attributions.
At some point in time the apartment bubble will burst, just like it did in 2007.My analogy, as I wrote then, is to bubble gum. When I was a kid I would blow the bubble until it burst, but I didn’t know exactly when that would happen.
There will be lenders and banks that will be burned when the bubble bursts.These valuations do have an upper limit.
Brian, I’ve been asked a hundred times the last few years if we’re overbuilt with rentals but the answer is “not yet” and truthfully we’re many years away from that occurring. The current economy actually feeds the apartment frenzy because it’s so difficult to get affordable single family living. The economics today have no relationship with those of 2007 nor your bubblegum. Richmond has only recently been discovered by institutional finance powers. We’ve finally reached that “tipping point” predicted by Tom Papa six or seven years ago and we’re becoming a modern American city. Richmond has wings!