Local real estate investor and developer Capital Square is continuing its string of big-ticket apartment deals, while entering the hospitality business for the first time.
The company last week bought The Trails at Short Pump, a 350-unit apartment complex for $89.2 million. Meanwhile, in South Carolina, the Innsbrook-based company launched its first hotel project.
The 23 Trails at Short Pump buildings are at 3900 Acadia Lane. The complex is just east of West Broad Village, where Capital Square plans to build its new headquarters. The company also owns the Flats at West Broad Village, an apartment complex it bought last year for a record $111 million.
The Trails deal is worth $255,000 per door, a price close to what Capital Square paid last month when it bought Hunter’s Chase apartments in Chesterfield for $79 million.
Trails at Short Pump were recently valued by Henrico County at $58.1 million. It is over 98% occupied.
The seller in the deal was New York-based company Angelo Gordon, which bought the apartments in 2019 for $63 million.
Angelo Gordon also recently sold the 664 The Acclaim at Carriage Hill seniors’ apartments in Henrico to another New York company for $138 million.
Will Mathews and Tommy Leachman of Colliers International represented Angelo Gordon in the Trails deal.
The 33-year-old Trails resort is a bit older for Capital Square, which is known for acquiring new resorts and building its own from the ground up, like it does in Scott’s Addition.
Whit Huffman, the company’s chief investment officer, said the company and its investors like the opportunity to invest in both newer and value-added apartments.
“By leveraging our in-house development and acquisition teams to come up with a strategy to renovate unit interiors, to upgrade amenities, (it allows us) to do things to charge more rent and increase value assets,” Huffman said. “Our investors generally like to be exposed to both (Class A and value-added properties).
Huffman said they plan to renovate everything from floors and appliances to countertops and bathrooms in The Trails units as they are renewed. Huffman said the units currently rent for about $1,400 a month, or $1.60 per square foot, and said it’s too early to estimate what they’ll eventually do.
Capital Square now has 51 properties with 13,110 units in its portfolio, including 3,333 units in the Richmond area.
Days after the apartments closed, Capital Square opened an upscale five-story extended-stay Roost hotel at 529 King St. in downtown Charleston, South Carolina.
He is tackling the project with Method Residential, a firm specializing in the development and operation of “apartment-hotels“, with units that can be rented for a few nights, weeks or months. The Charleston Hotel will be the sixth under the Roost brand, joining locations in Detroit, Cleveland, Tampa and Method’s hometown of Philadelphia.
The hotel’s 50 rooms will each be equipped with a kitchen and cupboards stocked with cutlery and crockery. The property also includes coworking rooms, gyms and a rooftop restaurant and bar.
Huffman said the project was a good entry into the hospitality industry for Capital Square.
“We have never been hotel investors; we have always been multi-family investors. It really bridges the gap between a hotel and an apartment,” he said.
Huffman said the concept is for transient employees who come to work for less than a year, but don’t want to live in a traditional hotel room all the time.
He added that the concept could conceivably have a future in Richmond.
“I could absolutely see it working in Richmond. We focused on what else we can bring to Richmond,” Huffman said. “I think a platform like Roost is incredibly beneficial, especially with cities that have meaningful healthcare jobs, which Richmond obviously does.”