Local apartment complex buying spree continues with three sold for $44.1 million

A New York City real-estate investment and asset-management company has spent a combined $44.06 million on three Winston-Salem apartment complexes it views as viable fixer-uppers.

Affiliates of Arch Cos. paid $15.94 million for the 189-unit Chesterfield Apartments, $15.45 million for the 312-unit Twin City Apartments and $12.67 million for the 228-unit Silas Creek Apartments.

Chesterfield is at 3411 Old Vineyard Road, Twin City is at 1805 Franciscan Terrace and Silas Creek is at 1010 Oak Grove Road.

The sellers are affiliates of a residential real-estate developer based in Jacksonville Beach, Fla., according to Forsyth County Register of Deeds filings Monday. The sales were completed Dec. 4.

Counting the Arch purchases, there have been at least 30 existing apartment complexes sold in Forsyth over the past 16 months for a combined $280.1 million.

As with many of the other apartment-complex acquisitions, Arch officials said they were attracted by the socioeconomic trends in Winston-Salem and the Triad.

“We’re really big fans of the Triad,” said Jared Chassen, a partner with Arch.

“We like the employment diversity, it’s a great place to live, and we believe each of these complexes have a really compelling story to tell.”

Chassen said work has begun on significant internal and external renovations at each complex, such as roofing, flooring, paint and reopening on-campus pools.

“The apartments will be brought back to be as shiny of a diamond as they can be,” Chassen said. “The improvements will be made in phase to minimize the disruption to tenants.

“We’re not about pricing people out of their apartment, but our goal is to improve each complex to where we can get a close to full occupancy as possible.”

Driving the apartment selling and building trends, according to economists, are millennials — those born between 1981 and 1996.

“The sudden interest in speculative apartment development is really a risk-capital response to millennial demographic and psychographic trends in the last decade,” said Tony Plath, retired finance professor at UNC Charlotte.

“The current generation of young adults is simply postponing milestone events, like marriage, buying a house and having kids until well into their 30s.”

The Urban Institute said in a 2018 millennial housing report that the marriage rate among young adults has fallen from 52.3% in 1990 to 38.5% in 2015.

Mark Vitner, a senior economist for Wells Fargo Securities, said investors “are trying to find what few pockets of value there are left in the apartment market.”

“Prices have been bid up so much in larger markets, such as Charlotte, Raleigh and Nashville, that investors are increasingly looking to markets that have been overlooked and show great potential for growth.

“Winston-Salem and Greensboro are at the top of the list of overlooked markets.”

The most expensive in an expansive trend of Forsyth apartment-complex sales involved The View complex in Winston-Salem. A Colorado real-estate investment group changed ownership affiliation of the 433-unit complex at 5010 Split Rail Circle, off University Parkway, in July.

The transaction, valued at $28 million, represented a transfer between affiliated members of Interurban Cos. of Centennial, Colo.

The owner is now listed as Interurban Commerce Park LLP.

In September, the Springbrook Apartments complex, one of the largest in the Triad, was sold for $19.4 million to Greystone Capital Kernersville LLC, based in Charlotte.

In September, California real-estate development group Morrison Avenue Capital Partners flipped the Morgan Place Apartments complex in Clemmons for $18.83 million, making a $4.53 million profit in just 14 months of ownership.

The Hilltop House Apartments complex in downtown Winston-Salem was sold in July for $17.75 million by L.M. “Bud” Baker, the former top executive of Wachovia Corp.

By: Richard Craver, Winston-Salem Journal

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