Croatan Joint Venture Sells Virginia Multifamily Property for $54.1 Million
Croatan Investments, a sponsor of private placements and Delaware statutory trusts, and its institutional joint venture partner, Harbert Management Corporation, sold Springhouse Apartments in Newport News, Virginia for $54.1 million.
Croatan Investments, a sponsor of private placements and Delaware statutory trusts, and its institutional joint venture partner, Harbert Management Corporation, sold Springhouse Apartments in Newport News, Virginia to L5 Investments and BH Management Services for $54.1 million.
The property was purchased from Bluerock Real Estate in August 2016 for nearly $38.2 million. Over a three-year hold, the company said that the sale resulted in a 33 percent gross IRR and 2.27x gross equity multiple on invested capital.
Built 1985, Springhouse Apartments is a 432-unit within close proximity to the Thomas Jefferson National Accelerator Facility (Jefferson Lab), a U.S. Department of Energy Office of Science national laboratory, as well as City Center at Oyster Point, the Joint Base Langley-Eustis military facility, and the Virginia Tech Newport News Center campus.
The company noted that the current $716 billion defense budget is driving employment and rental growth of 5 percent annually within the submarket, with new multibillion, multiyear aircraft carrier and submarine contracts leading thousands of new jobs and infrastructure development in the region.
A $3.5 million renovation was completed to the unit interiors, clubhouse, building exteriors, common areas, and community amenities, and company noted that the property’s renovated units achieved on average a $150 rental rate increase and 18 percent rent premium over non-renovated units.
Croatan Investments, a privately-held investment manager and alternative investment sponsor, specializes in multifamily real estate and sponsors products positioned towards independent broker dealers, registered investment advisory firms, and institutional investors.
The firm is headquartered in Virginia Beach with offices in Atlanta, Austin, Dallas, and Singapore. The Croatan portfolio currently includes multifamily properties located in the Mid-Atlantic and Sun Belt regions.
