RALEIGH, N.C.-Philadelphia-based TRECAP Partners, a managed fundfor institutional investors, has acquired majority interest in a452-unit apartment complex in a joint venture with RobinsonDevelopment Group. TRECAP paid $38 million for its stake inStonehedge Apartments, bringing its year-to-date multifamilyacquisition total to $144 million.

|

Stonehedge was built in four phases between 1985 and 1993. Thecomplex is more than 95% leased and offers opportunities forcapital upgrades to increase rents in what the company sees as animproving leasing environment.

|

“The play is Raleigh,” Michael McNamara, managing director andhead of acquisitions for TRECAP, tells GlobeSt.com. “We likeRaleigh because of its strength in intellectual capital. We alsolike the fact that this submarket hasn’t seen anything built inmany years. And we are starting to see improvements in rents in thesubmarket in our existing portfolio.”

The Stonehedge sale continues the Triangle multifamily investmenttrend. Multi-housing transaction volume in Raleigh-Durham rose to$179 million in the third quarter, bringing total sales volume to$378 million for the year, according to Grubb & Ellis. Demandfor multi housing assets has become increasingly competitive in theTriangle, the firm reports, and a significant number of propertieshave been placed on the market in recent months as owners seize theopportunity to capitalize on strong pricing fundamentals.

|

Stonehedge is a prime example. Centrally located near I-40 andI-540 in North Raleigh, Stonehenge features garden-style apartmentson 47 landscaped acres. The property offers a large clubhousefacility five indoor and outdoor swimming pools, tennis andbasketball courts, playgrounds, a business center, and fitnesscenter.

|

"The Raleigh multifamily market shows signs of strengthening,supported by burgeoning high tech industries and three majorresearch universities in the metropolitan area,” McNamara says. “Webelieve the investment is extremely well positioned to capitalizeon future growth trends."

Indeed, Triangle rental rates continued to increase in the thirdquarter. Average rates per unit ended at $817, up 1% percent overthe second quarter, Grubb & Ellis reports. Leasing demandcontinued to strengthen, sending occupancy up by 210 basis pointsto 93.9 percent. New construction remains minimal as developmentsare put on hold due to financing constraints and developers waitfor the economic recovery to gain traction.

|

“It’s part of our strategy to buy well-located value-addapartments,” McNamara says. “We are focused on markets where thereis a higher percentage of college-educated residents because wethink those are the kinds of cities that are going to lead us outof the recession through innovation. Raleigh is one of thosecities.”

Want to continue reading?
Become a Free ALM Digital Reader.

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.