The Glenmoor Oaks apartments sold for $72 million. (Photos courtesy of Glenmoor Oaks website)
Two months after completing its latest local acquisition, a real estate firm out of Utah has added to its Richmond area holdings with the purchase of a newly built apartment complex in Chesterfield’s Moseley area.
NorthRock Cos. bought the 248-unit Glenmoor Oaks apartments at Magnolia Green in a deal that closed late last month.
The 2-year-old complex sold July 28 for $72 million, according to Shane Burnette, who was part of the development group behind the apartments. The transaction, which comes out to about $290,000 per unit, was not reflected on the county’s online property records as of Tuesday.
The apartments include one-, two- and three-bedroom units.
The selling entity was an LLC led by Burnette and Nick Wexler, a managing partner with homebuilder Schell Brothers. Burnette is a former Richmond division president for the Delaware-based builder, whose headquarters is listed as the LLC’s address.
Burnette said the group had planned to hold onto the property after completing it in mid-2020 but changed their minds in light of a changing market that doubled the property’s valuation this year.
Developed at a cost of $40 million, the eight-building, 21-acre property is currently assessed by the county at $57.1 million. Last year, it was assessed at about half that amount: $28.4 million. The year before, when the complex was completed in July 2020, it was assessed at $14.7 million.
“While we designed, built and put in place the management to do a long-term hold, we thought the market was likely going through a semi-temporary dislocation,” Burnette said in an email. “Given the market was in this state of fluctuation – and we fortunately had an asset that benefitted from this valuation swing – we thought the most prudent financial decision was to monetize it.”
Burnette added, “If Nick and I solely owned this we wouldn’t have sold, but as stewards of other people’s capital we thought it was the right decision.”
The group enlisted Carter Wood and Drew White with Berkadia, who listed the property and brokered the deal. The pair also previously worked the seller’s side in NorthRock’s purchase of the 221-unit Innslake Place Apartments, a newer complex in Innsbrook that it bought in December for $63 million.
NorthRock entered the local market in 2019 with its $67 million purchase of the 296-unit Belvedere Apartments in Midlothian. Its other Richmond area holdings include Copper Mill, a 192-unit complex in western Henrico that it bought in May for $50.2 million.
Glenmoor Oaks, at 18101 Golden Bear Trace, consists of eight four-story buildings with apartments ranging from one to three bedrooms and from about 600 to 1,200 square feet in size. Burnette said the apartments leased up within a year and were 95 percent occupied when the transaction closed.
Pegasus Residential is managing the property for NorthRock. Burnette said it recently raised the apartments’ rents, which, based on availability Tuesday on Glenmoor Oaks’ website, range from about $1,500 for a one-bedroom unit to $2,300 for a three-bedroom.
The eight-building complex fills 21 acres at Magnolia Green.
The complex includes a clubhouse, leasing office, pool, grilling area, fitness center, yoga studio and cybercafé. Construction started in spring 2019. Branch Builds was the builder, and Poole & Poole was the architect.
Meanwhile, Burnette and Wexler’s development group is wrapping up work on The Station at Chester Village, a 201-unit complex that’s nearly complete beside Chester Road just north of Route 10. The property is currently pre-leasing, and Burnette said the first of the five buildings will open to residents before Labor Day.
Jonathan joined BizSense in early 2015 after a decade of reporting in Wilmington, N.C., and at the Henrico County Leader. The Virginia Tech grad covers government, real estate, advertising/marketing and other news. Reach him at [email protected] or (804) 308-2447.
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Congrats are in order to Burnette and Wexler for having such success on their very first apartment community development, as well to the Berkadia team for executing the sale. The community is really well done.
At some time in the future the bubble will burst. In all probability it will take place when supply catches up to demand. The demand was created as a result of the Great Recession from 2007-2011, when multifamily construction virtually came to a halt.
No one has a crystal ball to determine when the bubble will burst, but it always does, and some residential Owners/developers will get burned.
Having said this congratulations go out to Burnette and Wexler as Bruce Milam stated.
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