HPP Real Estate—a division of Hill Property Partners—and Machine Investment Group have closed on the recapitalization of North Hill Apartments, a 148-unit community in the Hilltop submarket of Virginia Beach, Va. HPP acquired the property, managed by Greystar, back in 2021, for $28.2 million. The recapitalization marks the first transaction for the joint venture, as the partnership plans to acquire more value-add properties in the future.
North Hill Apartments features two-bedroom units, each averaging 858 square feet, across 13 buildings. The controlled-access three-story community features a fitness center, clubhouse and pool. Located at 624 Suhtai Court, within the Hilltop Retail Corridor and close to the beach, the property offers access to several retail, entertainment and dining options.
Repositioning plans continue
The 126,936-square-foot property was built in 1985 and after last year’s ownership change, it underwent a repositioning program that included a multimillion-dollar capital improvement plan and a rebranding strategy. In addition to a new fitness center and renovation of the pool area, HPP also implemented in-unit renovations and revamped the dog park. The outcome led to a rent increase of more than 25 percent in less than a year.
The new joint venture plans to continue the value-add program and reposition the asset as a Class A community. Upcoming renovations are slated for completion by the end of the year.
HPP plans to secure between $1.5 and $10 million in GP and co-GP capital for future acquisitions. MIG has also announced the closing of Machine Real Estate Fund I with approximately $350M in primary and co-investment capital.
Value-add investment continues to be a strong trend. Recently, Harbor Group International has purchased Colter Park Apartments, a 384-unit community in Phoenix. The current owner is set to implement a $5 million capital improvement plan, which will target the renovation of the units that were not yet upgraded, as well as common-area improvements.