The townhouse-style apartments were built in 1972. (Images courtesy Millspring Commons)
For the fifth time in nine years, an apartment complex in western Henrico is once again in the hands of a new owner, after being unloaded by the same out-of-town firm that’s leading Richmond’s Diamond District redevelopment.
The 159-unit Millspring Commons apartments sold last month for $34.1 million, according to the firms involved in the deal. The transaction, which closed June 20, was not reflected in the county’s online property records Wednesday.
The buyer is RailField Partners, a Maryland-based firm that completed the purchase through its RLM Preservation Fund. The company describes the fund as being aimed at preserving income-based housing, with at least half of the units required to be rented at 80 percent of the area median income (AMI).
The seller was an affiliate of Republic Properties Corp., a Washington, D.C.-based property management firm that bought the complex in early 2020 for $28.5 million.
Republic also is the lead developer on the Diamond District team that’s working with the City of Richmond on the $2.4 billion redevelopment that includes a new stadium to replace The Diamond. Republic is working locally on that project with Thalhimer Realty Partners.
Millspring Commons, at Staples Mill and Hungary Spring roads, is next to Dumbarton Elementary School and across from the Kroger-anchored Staples Mill Marketplace shopping center. The 17-acre property, which includes an adjoining undeveloped parcel, was assessed by Henrico this year at $27.8 million combined.
The clubhouse was renovated in the past three years.
At $34.1 million, RailField’s purchase comes out to nearly $215,000 per unit. The townhouse-style apartments were 96 percent leased at closing, said Jon Siegel, RailField’s chief investment officer.
Siegel said RailField had been tracking Millspring Commons since Republic bought it in January 2020, just before the start of the pandemic. He said Republic invested in upgrades to the property, including renovations to some of the units and the clubhouse, before initially putting it up for sale last year. Siegel said the property was relisted in March and the deal came together in April.
Jon Siegel
“We’ve been tracking it for a while,” Siegel said Wednesday. “A lot of deals last year that people were looking to sell ended up not trading because interest rates went up and things have been a little crazy in the market.”
Of Millspring Commons, Siegel added, “It’s a good little property. We like the location. We like the side of town that it’s on, and it has the townhouse product that we really like.”
Built in 1972, Millspring Commons consists of one-, two- and three-bedroom townhome-style apartments ranging from 700 to 1,230 square feet in size. Monthly rents start near $1,500 and average just under $1,700, Siegel said.
Siegel said rates for at least 50 percent of the units would remain largely the same, because of the 80-percent AMI requirement for the fund that was used in the deal.
“There’s still upside for another owner in terms of upgrading units, but we also bought this with a fund,” Siegel said. “The focus of that is probably a little different from a lot of people that are buying, looking for the more typical value-add. We’re certainly looking at that. We’re also looking at it at the angle of preserving it as workforce housing.”
Referring to about $1.5 million that the company plans to put into Millspring Commons, Siegel added, “We have a lot of money set aside to upgrade the property, but we’re trying to keep it affordable so the tenant base, similar to who lives there now, can continue to live there.”
The units average about 1,000 square feet in size and nearly $1,700 in monthly rent.
Siegel said the company would continue exterior upgrades that Republic had started, as well as enhancements to landscaping and amenities and potentially upgrades to more of the units.
“We’ll look at upgrading units upon turnover if it makes sense,” he said. The company brought on Georgia-based Pegasus Residential to manage the property.
Millspring Commons is the third apartment complex that RailField has bought in metro Richmond since entering the market in 2017, when it purchased the 266-unit Courthouse Green in Chester for $25.3 million. It sold that property in 2020 to McCann Realty Partners for $33.7 million.
RailField’s other local holding is the Village at the Arbors apartments, near Chamberlayne Road and Azalea Avenue. It bought the 292-unit complex at 5613 Crenshaw Road in 2018 for just over $17 million.
RailField is the fifth buyer to pick up Millspring Commons in less than a decade. Since 2014, when California-based Fairfield Residential bought it for $14.5 million, Millspring Commons has changed hands almost every other year on average.
In 2016, an entity controlled by Florida-based Electra America paid over $18 million for the property as part of a 12-property portfolio purchase. The following year, New York-based Aurelie Capital – the firm behind the Ainsworth development at the former Laurel Park Shopping Center – purchased Millspring Commons for $20.6 million, before selling it to Republic three years later.
Siegel attributed the frequent turnover in ownership to a mix of factors that he said makes Millspring Commons appealing to investors.
“It’s in a good part of town for multifamily. There’s a lot of jobs near there, but it’s a little bit more of an affordable pocket there,” he said. “It has the big units. It’s an older property and it’s been well-maintained, but the units haven’t all been upgraded.
“It has upside, and it can demonstrate the upside,” he said. “As soon as they can demonstrate the upside, they turn around and sell it.”
Republic was represented in its sale by CBRE, working locally with Calvin Griffith and Peyton Cox.
Siegel said RailField is not working on other deals in the Richmond market but is looking for opportunities.
“We’re trying,” he said. “It’s tough to make the numbers work on a lot of these deals right now.”
The company’s portfolio stretches from Texas to the East Coast and includes two other properties in Virginia, in Charlottesville and Newport News.
Millspring Commons joins other apartment properties along that stretch of Hungary Spring that have changed hands in recent years. Farther south along the corridor, Maple Springs Apartments sold to Henrico-based Capital Square in 2021 for nearly $35 million.
The townhouse-style apartments were built in 1972. (Images courtesy Millspring Commons)
For the fifth time in nine years, an apartment complex in western Henrico is once again in the hands of a new owner, after being unloaded by the same out-of-town firm that’s leading Richmond’s Diamond District redevelopment.
The 159-unit Millspring Commons apartments sold last month for $34.1 million, according to the firms involved in the deal. The transaction, which closed June 20, was not reflected in the county’s online property records Wednesday.
The buyer is RailField Partners, a Maryland-based firm that completed the purchase through its RLM Preservation Fund. The company describes the fund as being aimed at preserving income-based housing, with at least half of the units required to be rented at 80 percent of the area median income (AMI).
The seller was an affiliate of Republic Properties Corp., a Washington, D.C.-based property management firm that bought the complex in early 2020 for $28.5 million.
Republic also is the lead developer on the Diamond District team that’s working with the City of Richmond on the $2.4 billion redevelopment that includes a new stadium to replace The Diamond. Republic is working locally on that project with Thalhimer Realty Partners.
Millspring Commons, at Staples Mill and Hungary Spring roads, is next to Dumbarton Elementary School and across from the Kroger-anchored Staples Mill Marketplace shopping center. The 17-acre property, which includes an adjoining undeveloped parcel, was assessed by Henrico this year at $27.8 million combined.
The clubhouse was renovated in the past three years.
At $34.1 million, RailField’s purchase comes out to nearly $215,000 per unit. The townhouse-style apartments were 96 percent leased at closing, said Jon Siegel, RailField’s chief investment officer.
Siegel said RailField had been tracking Millspring Commons since Republic bought it in January 2020, just before the start of the pandemic. He said Republic invested in upgrades to the property, including renovations to some of the units and the clubhouse, before initially putting it up for sale last year. Siegel said the property was relisted in March and the deal came together in April.
Jon Siegel
“We’ve been tracking it for a while,” Siegel said Wednesday. “A lot of deals last year that people were looking to sell ended up not trading because interest rates went up and things have been a little crazy in the market.”
Of Millspring Commons, Siegel added, “It’s a good little property. We like the location. We like the side of town that it’s on, and it has the townhouse product that we really like.”
Built in 1972, Millspring Commons consists of one-, two- and three-bedroom townhome-style apartments ranging from 700 to 1,230 square feet in size. Monthly rents start near $1,500 and average just under $1,700, Siegel said.
Siegel said rates for at least 50 percent of the units would remain largely the same, because of the 80-percent AMI requirement for the fund that was used in the deal.
“There’s still upside for another owner in terms of upgrading units, but we also bought this with a fund,” Siegel said. “The focus of that is probably a little different from a lot of people that are buying, looking for the more typical value-add. We’re certainly looking at that. We’re also looking at it at the angle of preserving it as workforce housing.”
Referring to about $1.5 million that the company plans to put into Millspring Commons, Siegel added, “We have a lot of money set aside to upgrade the property, but we’re trying to keep it affordable so the tenant base, similar to who lives there now, can continue to live there.”
The units average about 1,000 square feet in size and nearly $1,700 in monthly rent.
Siegel said the company would continue exterior upgrades that Republic had started, as well as enhancements to landscaping and amenities and potentially upgrades to more of the units.
“We’ll look at upgrading units upon turnover if it makes sense,” he said. The company brought on Georgia-based Pegasus Residential to manage the property.
Millspring Commons is the third apartment complex that RailField has bought in metro Richmond since entering the market in 2017, when it purchased the 266-unit Courthouse Green in Chester for $25.3 million. It sold that property in 2020 to McCann Realty Partners for $33.7 million.
RailField’s other local holding is the Village at the Arbors apartments, near Chamberlayne Road and Azalea Avenue. It bought the 292-unit complex at 5613 Crenshaw Road in 2018 for just over $17 million.
RailField is the fifth buyer to pick up Millspring Commons in less than a decade. Since 2014, when California-based Fairfield Residential bought it for $14.5 million, Millspring Commons has changed hands almost every other year on average.
In 2016, an entity controlled by Florida-based Electra America paid over $18 million for the property as part of a 12-property portfolio purchase. The following year, New York-based Aurelie Capital – the firm behind the Ainsworth development at the former Laurel Park Shopping Center – purchased Millspring Commons for $20.6 million, before selling it to Republic three years later.
Siegel attributed the frequent turnover in ownership to a mix of factors that he said makes Millspring Commons appealing to investors.
“It’s in a good part of town for multifamily. There’s a lot of jobs near there, but it’s a little bit more of an affordable pocket there,” he said. “It has the big units. It’s an older property and it’s been well-maintained, but the units haven’t all been upgraded.
“It has upside, and it can demonstrate the upside,” he said. “As soon as they can demonstrate the upside, they turn around and sell it.”
Republic was represented in its sale by CBRE, working locally with Calvin Griffith and Peyton Cox.
Siegel said RailField is not working on other deals in the Richmond market but is looking for opportunities.
“We’re trying,” he said. “It’s tough to make the numbers work on a lot of these deals right now.”
The company’s portfolio stretches from Texas to the East Coast and includes two other properties in Virginia, in Charlottesville and Newport News.
Millspring Commons joins other apartment properties along that stretch of Hungary Spring that have changed hands in recent years. Farther south along the corridor, Maple Springs Apartments sold to Henrico-based Capital Square in 2021 for nearly $35 million.
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