Bluerock Value Exchange, a national sponsor of syndicated 1031 exchange offerings, has sold Plaza Gardens, a 200-unit apartment community located in Overland Park, Kansas. The property was acquired by BR Plaza Gardens DST, a Delaware statutory trust structured for 1031 like-kind exchanges for accredited investors.
Bluerock purchased Plaza Gardens in August 2008 and managed the property during the economic and real estate downturn of the Great Recession, completed a refinance and recapitalization for investors in 2015 for an all-in investment cost of approximately $30.2 million, and sold the property for approximately $33.2 million in July 2019.
The company noted that the total return on equity investment, including distributions, was 134 percent.
“We are pleased with the overall investment success for investors in our Plaza Gardens property,” said Josh Hoffman, president of Bluerock Value Exchange. “This transaction is significant because the U.S. entered the Great Financial Crisis after we acquired the property, and as a result of which the property endured a sluggish period of lower occupancy and rent growth.”
“However, Bluerock worked actively to refinance and recapitalize the property to effectuate capital improvements, without a capital call and while preserving a 1031 exit, and managed the property aggressively into a recovering market environment to maximize value for the investors,” he added.
This sale marks the third full-cycle DST property disposition by Bluerock Value Exchange in 2019. The company said that in total it has sold three properties for a combined $124 million, as compared to total investor purchase price of $87.5 million, returning more than $74 million in total returns, including distributions, on $36.5 million of original equity, for an average annual return of approximately 23.6 percent.
“We believe the measure of the best investment sponsors is their performance in the worst of economic times, more so than the best of times. Plaza Gardens is a testament to the Bluerock organization’s commitment to manage through all cycles to achieve a successful outcome for its Investors,” said Jeffrey Schwaber, CEO of Bluerock Capital Markets.
Plaza Gardens is a Class A townhome community built in 1999 on 20 acres with units averaging 1,437 square feet with amenities that include a swimming pool with a hot tub spa, clubhouse with 24-hour fitness center and WiFi Java lounge, playground, basketball court, courtyards and dog park.
Bluerock Value Exchange focuses on Class A assets and has structured 1031 exchanges on more $1.4 billion in total acquisition cost and approximately 8.6 million square feet of property.