REAL ESTATE INVESTMENT
Terreno Realty Corporation | May 23, 2022
Terreno Realty Corporation, an acquirer, owner and operator of industrial real estate in six major coastal U.S. markets, acquired an industrial property in Newark, New Jersey on May 19, 2022 for a purchase price of approximately $11.9 million.
The 2.4-acre improved land parcel at 127-167 and 147-163 Doremus Avenue is adjacent to Exit 15E of the New Jersey Turnpike and Terreno Realty Corporation’s 85 and 87 Doremus Avenue properties. The property is 100% leased on a short-term basis to one tenant and the estimated stabilized cap rate is 6.9%.
Estimated stabilized cap rates are calculated as annualized cash basis net operating income stabilized to market occupancy (generally 95%) divided by total acquisition cost. Total acquisition cost includes the initial purchase price, the effects of marking assumed debt to market, buyer’s due diligence and closing costs, estimated near-term capital expenditures and leasing costs necessary to achieve stabilization.
AboutTerreno Realty Corporation
Terreno Realty Corporation acquires, owns and operates industrial real estate in six major coastal U.S. markets: Los Angeles; Northern New Jersey/New York City; San Francisco Bay Area; Seattle; Miami; and Washington, D.C.
REAL ESTATE TECHNOLOGY
FAIRSTEAD | July 26, 2022
Fairstead, a purpose-driven, vertically integrated real estate company committed to sustainable development and the creation and preservation of high-quality housing, today announced the acquisition of the historic Aurora Apartments (Aurora) tower in the Tobin Hill neighborhood of San Antonio. Located at 509 Howard Street, the 11-story building comprises 105 apartments that are home to low-income senior residents. Fairstead will invest $15 million to rehabilitate Aurora Apartments while preserving Aurora's affordability and historic character long-term.
The renovations will modernize the interior homes of the 92-year-old property and preserve its historic façade as well as original mosaic tile flooring and walls, historical interior doors, and hardware. Renovations will upgrade the infrastructure of the building including a new emergency generator, electrical panels and main switchgear, installing a sprinkler system, two new elevators, and new roofing. The apartments will also be upgraded with new Energy Star appliances, kitchens and bathrooms, and HVAC units. Construction is expected to begin this summer.
"Fairstead is proud to be stewards of historic properties across the country, and we are bringing our approach to preserving both history and affordability to the Aurora Apartments, By expanding our footprint in Texas, we can ensure that its critical affordable housing stock is not only protected but improved and modernized. Our plan to overhaul the homes at Aurora will ensure our senior residents can age in place with dignity – something we are committed to doing nationwide."
Allan Izzo, Director, Development at Fairstead
Fairstead is financing the rehabilitation in partnership with the Las Varas Public Facility Corporation, a nonprofit managed by the San Antonio Housing Authority, the Texas Department of Housing and Community Affairs, Capital One, N.A., and Boston Financial.
"About half of the residents receiving housing assistance from SAHA are elderly on a fixed income," said Tim Alcott, the San Antonio Housing Authority Chief Legal and Real Estate Officer. "We celebrate partnerships that help maintain affordable housing options for the families we serve and provide a place of security."
"Boston Financial is proud to have partnered with Fairstead on the preservation of Aurora Apartments in San Antonio, Texas. Our investment has helped Fairstead to modernize 105 units of housing for the residents of this historic community, especially seniors, and preserved much-needed affordable homes for the region," said Stephen Napolitano, Senior Vice President, Boston Financial. "We believe in Fairstead's commitment to building vibrant communities across the US, and our work together reinforces our own vision to create a future where everyone has a home, one investment at a time."
"This renovation will help bring transformative change to Aurora Apartments with fully renovated unit interiors and common areas, as well as accessibility and energy efficiency improvements" said Evan Williams, senior vice president of Agency Finance at Capital One. "By leveraging our relationships with Fairstead and Freddie Mac, as well as the rest of the development team, Capital One was able to arrange an index lock, which mitigated the risk of interest volatility and ensured the project benefited from a 2.92% treasury rate."
Fairstead is partnering with the non-profit Rainbow Housing Assistance to provide much-needed social services to residents through the company's commitment to Community Impact.
"Rainbow is grateful for the opportunity to partner with Fairstead at Aurora Apartments. We are excited to bring valuable programs and services to the residents of the community and promote social and economic advancements while ensuring tenant stabilization," said Flynann Janisse, President and Executive Director of Rainbow Housing Assistance Corporation. "Rainbow will offer a variety of programs targeting financial literacy, credit enhancements, education, ESL, career development and immediate employment. We will establish tailored programing to meet the unique needs of each individual and family that calls Aurora Apartments home. We look forward to lifting lives in partnership with Fairstead."
Built in 1930 as a luxury hotel in the Neo-Gothic architectural style, Aurora is listed on the National Register of Historic Places. Known for its hand-carved fireplaces and grand common spaces, the vintage 11-story apartment building will remain a pet-friendly place to call home. Half of the building's units are reserved for residents making up to 50 percent of the Area Median Income (AMI) and the other half are for households making up to 60 percent AMI.
This news follows Fairstead's recent acquisition of the 160-unit affordable housing complex Gateway Apartments at Lake Jackson in the Greater Houston metropolitan area. Fairstead is renovating and expanding Gateway's amenity offerings, including a fitness room and playground, and is transforming the property's outdoor recreation spaces to create a more connected community for residents.
Fairstead is a purpose-driven vertically integrated real estate developer specializing in creating sustainable, high-quality housing. The firm's national footprint includes more than $6 billion in assets and identified pipeline. With offices in New York, Maryland, and South Carolina, Fairstead's team manages 90+ communities across the country and runs its comprehensive real estate platform, which includes acquisitions and development, venture capital investments in prop tech, design and construction, energy and sustainability, property management, marketing, and leasing. The firm also administers one of the industry's most proactive community impact programs to provide on-site support services to residents.
REAL ESTATE INVESTMENT
Capital Square | June 07, 2022
Capital Square, one of the nation's leading sponsors of tax-advantaged real estate investments and an active developer of multifamily communities, announced the acquisition of Village at Westland Cove, a Class A, 240-unit multifamily community in Knoxville, Tennessee. The community was acquired on behalf of CS1031 Village of Westland Cove Apartments, DST.
This is Capital Square's sixth acquisition of a multifamily community in Tennessee for the DST/1031 exchange program. Village at Westland Cove is located in one of the hottest housing markets in the nation for 2021.1 Employment in the area is exceptionally strong, with the Oak Ridge Reservation and National Laboratory, operated by the U.S. Department of Energy, only 19 miles away, generating 14,667 full-time jobs and wages totaling over $1.3 billion."
Louis Rogers founder and chief executive officer of Capital Square
Completed in 2019, Village at Westland Cove is located at 9635 Westland Cove Way along Interstate 140. The 28.2-acre luxury multifamily community sits on the shore of scenic Fort Loudoun Lake. It offers one-, two- and three-bedroom units averaging 1,147 square feet with best-in-class amenities. The community features include a state-of-the-art fitness center, Amazon lockers and coolers for grocery deliveries, car care center, two pet play areas, coffee bar, business center, food truck nights, gaming patio with bocce ball court, outdoor firepit, outdoor kitchen, club house, swimming pool, kayaks available to residents, as well as lake access via a resident dock.
Village at Westland Cove is located within close proximity of The Pinnacle at Turkey Creek, a 650,000-square-foot shopping center that includes more than 65 retail stores and restaurants. The property is in the 10th hottest housing market in the country for 2021,1 with a 5-year value increase of 55%, according to Zillow Group. Turkey Creek Medical Center, a Level III trauma center that is part of Tennova Healthcare, lies within two miles of the property. Situated further along the I-140 and I-40 are attractions such as Knoxville Museum of Art, Market Square and Zoo Knoxville.
The Oak Ridge Reservation, operated by the U.S. Department of Energy and home to Oak Ridge National Laboratory, is approximately 19 miles from the Village at Westland Cove and is the largest employer in the area. According to the East Tennessee Economic Council, approximately 14,667 full-time jobs were directly provided by the DOE and its major contractors within Tennessee in 2020, with annual wages and salaries totaling nearly $1.311 billion.2 WBIR.com reports that Bill Lee, Tennessee's governor, recently announced a $72 million budget for the UT-Oak Ridge Innovation Institute, a collaboration between the University of Tennessee and Oak Ridge National Laboratory, in a bid to attract and maintain science, technology, engineering and mathematics (STEM) talent in the Knoxville area.3
"Village at Westland Cove is an exceptional multifamily property located in an idyllic setting with luxury amenities throughout," said Whitson Huffman, chief strategy and investment officer. "The local economy is thriving, with low unemployment, high average household income and growing demand for high-end apartment living such as that provided to the residents of Village at Westland Cove."
Data from Esri shows the average household income within a three-mile radius of the property reaches approximately $130,000. According to Yardi Matrix, Knoxville's rental rates are rising along with demand, with 18% year-over-year rent growth and 98.1% average occupancy as of March 31, 2022.
The Bureau of Labor Statistics reports that Knoxville witnessed an increase of over 19,000 job opportunities since February 2021, with unemployment rates reaching 2.8%. According to the BLS, job opportunities in the area should continue to grow with 3M Company announcing plans to invest approximately $470 million to expand their manufacturing facility in the Knoxville MSA, creating 600 new jobs by 2025.4
Taylor Bird, Nelson Abels, Robert Stickel, and Alex Brown of Cushman & Wakefield represented the seller.
Bird, executive director of Cushman & Wakefield, noted, "The Village at Westland Cove offers a truly unique asset coupled with an unrivaled amenity package, interior finishes and beautiful water views."
CS1031 Village of Westland Cove, DST seeks to raise $52.8 million in equity from accredited investors and has a minimum investment requirement of $50,000.
Since its founding in 2012, Capital Square has acquired 146 real estate assets for approximately 6,000 investors seeking quality replacement properties that qualify for tax deferral under Section 1031 of the Internal Revenue Code and other investors seeking stable cash flow and capital appreciation.
About Capital Square
Capital Square is a national real estate firm specializing in tax-advantaged real estate investments, including Delaware statutory trusts for Section 1031 exchanges, qualified opportunity zone funds for tax deferral and exclusion and a real estate investment trust (REIT). In recent years the company has become an active developer of multifamily properties in the southeastern US, with eight current projects totaling approximately 2,000 apartment units with a total development cost in excess of $600 million. Since 2012, Capital Square has completed more than $5.6 billion in transaction volume. Capital Square's executive team has decades of experience in real estate investments. Capital Square's related entities provide a range of services, including due diligence, acquisition, loan sourcing, property/asset management, and disposition, for a growing number of high-net-worth investors, private equity firms, family offices and institutional investors. Since 2017, Capital Square has been recognized by Inc. 5000 as one of the fastest growing companies in the nation for four consecutive years. In 2017, 2018 and 2020, the company was also ranked on Richmond BizSense's list of fastest growing companies. Additionally, Capital Square was listed by Virginia Business on their "Best Places to Work in Virginia" report in 2019 and their "Fantastic 50" reports in 2019 and 2020.