Capital Square, a sponsor of tax-advantaged real estate investments and developer of mixed-use multifamily communities, has broken ground on 529 King Street ROOST Apartment Hotel, an apartment hotel located in the Garden District of Charleston, South Carolina within a qualified opportunity zone. Construction is expected to be completed by summer 2023.
The development will be primarily funded with proceeds from Capital Square’s fourth qualified opportunity zone fund, CSRA Opportunity Zone Fund IV LLC, which raised approximately $15 million from accredited investors.
The five-story project will be comprised of 50 luxury units, including a mix of studio, one-, two- and three-bedroom units. The apartment hotel units will operate under the ROOST Apartment Hotel brand, a division of Method Residential. The final development will total approximately 32,000 net rentable square feet of apartment and retail space with a courtyard and rooftop lounge that will be open to the public. The facade will be “a modern interpretation of the historic Victorian-era aesthetic” that’s prevalent in Charleston, the company said.
“Charleston, for all of its southern charm and grace, lacks extended stay housing options. The problem was magnified during the COVID pandemic, when large portions of the economy were closed and construction mostly came to a halt,” said Louis Roger, founder and chief executive officer. “Capital Square is pleased to report that, in spite of the many challenges encountered during the pandemic, ground has been broken to build a luxury apartment hotel on world-famous King Street.”
Community amenities will include 44 valet-operated parking spaces, a private interior courtyard that will function as an open-air living room, a fitness center, a library and co-working space, a guest-only lounge, a semi-private terrace or balcony, and a publicly accessible rooftop lounge with views of downtown Charleston and the harbor.
The property is within close proximity to a variety of restaurants, cultural sites and entertainment venues, including the Waterfront Park Pier and Rainbow Row, as well as to the College of Charleston and other local institutions.
“Capital Square is an active developer of luxury properties in growing markets in the Southeast and we couldn’t be more pleased to begin construction on our inaugural project in Charleston,” said Whit Huffman, chief strategy and investment officer. “Charleston is a premier market, home to a growing community of high-income families and one of the nation’s most popular tourist destinations. 529 King Street will contribute to this legacy and become a premier destination for local residents and tourists alike.”
Capital Square has partnered with Morris Adjmi & LS3P as building architect, BL Harbert as general contractor, and Method Residential as the retail leasing agent and co-developer of the property.
Opportunity zones were created to stimulate long-term private investments in low-income urban and rural communities nationwide. Conceived as part of the Tax Cuts and Jobs Act of 2017, opportunity zone funds are intended to help foster economic growth by providing tax benefits to incentivize private investments in designated opportunity zones.
Capital Square recently launched CSRA Opportunity Zone Fund VII LLC to fund the development of a multifamily development in the Scott’s Addition neighborhood of Richmond, Virginia. The firm’s opportunity zone funds have initiated more than $330 million in development value to-date.
In other company news, Capital Square recently purchased The Trails at Short Pump, a 350-unit multifamily community in Richmond, on behalf of one of its Delaware statutory trust offerings.
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 a developer of multifamily and mixed-use properties in the southeastern US, with nine current projects totaling approximately 1,700 apartment units with a total development cost in excess of $600 million.
Since 2012, Capital Square has completed more than $6 billion in transaction volume. The firm’s related entities provide a range of services, including due diligence, acquisition, loan sourcing, property/asset management, and disposition, for high-net-worth investors, private equity firms, family offices and institutional investors.