Capital Square Receives Zoning Approval for Virginia Opportunity Zone Development

Capital Square – a sponsor of tax-advantaged real estate investments and an active developer and manager of multifamily communities – has been granted zoning approval from the Richmond City Council to develop an eight-story, mixed-use apartment community and luxury hotel in the Scott’s Addition designated opportunity zone in Richmond, Va.

The development will be funded with proceeds from Capital Square’s CSRA Opportunity Zone Fund IX, LLC. As The DI Wire previously reported, the project-specific opportunity zone fund aims to raise approximately $77 million in equity from accredited investors. Construction is slated to begin in summer 2025.

“Major developments like this require efficient regulatory processes and support from many stakeholders,” said Natalie Mason, executive vice president, co-head of development at Capital Square. “We were pleased to achieve zoning approval for this transformative project. We are grateful for the city of Richmond’s planning staff, the planning commission, and city councilmembers for their timely review and approval of the new mixed-use development.”

Located at 1600 Roseneath Road at the “main and main” intersection of Scott’s Addition, the 2.18-acre property will feature approximately 220 traditional apartment units and 100 furnished luxury hotel rooms. The property is within walking distance of a large concentration of popular breweries, farm-to-table restaurants with award-winning chefs, small businesses, lifestyle amenities and museums, including the Virginia Museum of Fine Arts, Science Museum of Virginia, and Virginia Museum of History and Culture.  Broad Street, with numerous services and amenities, including a full-service, 47,000-square-foot Whole Foods and a GRTC Pulse rapid transit station, is within blocks of the project.

“We are very pleased with the City Council’s approval of this development, which will further accelerate the transformation of Scott’s Addition,” said Whitson Huffman, co-chief executive officer. “As Capital Square’s sixth development in Scott’s Addition, this project will fill a large void in the neighborhood, which is in need of hospitality venues to meet the growing demand from visitors to Richmond seeking accommodations near the city’s most vibrant neighborhood.”

Directly adjacent to the property is The Otis, a 350-unit mixed-use multifamily development. The six-story, Class A community has studio, one-, two- and three-bedroom apartment units with bespoke kitchen and bathroom finishes, community spaces, and approximately 13,000 square feet of retail.

Capital Square also fully subscribed four other opportunity zone funds to develop projects in Scott’s Addition, including 352 apartment units at 2950 W. Marshall Road, and Scott’s Collection I, Scott’s Collection II, and Scott’s Collection III – each featuring a single-structure, ground-up development of Class A multifamily communities ranging in size from 60 to 80 units. In total, Capital Square has delivered, or is in the process of developing, over 1,230 multifamily units and 40,000 square feet of retail space within the Scott’s Addition opportunity zone.

Capital Square has invested more than $230 million in equity in the last five years toward the construction of eight developments in opportunity zones, totaling over 1,600 residential units and 40,000 square feet of retail. Four developments, totaling 600 units, are located in Scott’s Addition and have delivered and stabilized, having returned over $20 million to date to investors in net proceeds from refinancings.

Capital Square is a real estate firm specializing in tax-advantaged real estate investments, including Delaware statutory trusts for Section 1031 exchanges and qualified opportunity zone funds for tax deferral and exclusion. In recent years the company has become an active developer of mixed-use, multifamily properties in the southeastern United States, with eight current projects totaling over 2,000 apartment units with a total gross asset value of approximately $730 million. Since 2012, Capital Square has completed more than $7.8 billion in transaction volume.

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