94-Unit Apartment Asset Sold to California Hedge Fund; 440 on Third Starts Construction
- Jan 15, 2014
Black Warrior LLC has sold Newport Villa Apartments, a 94-unit apartment complex located on La Annie Drive, north of Florida Boulevard, cashing in $1.2 million or $12,765 per unit for the asset, according to a report by Greater Baton Rouge Business Report. CJ Johnson of 3Chix Realty represented both the seller and the buyer, a California-based hedge fund operating as Newport Holdings LLC. Originally listed for $1.8 million, the 90 percent occupied property had four interested buyers within a month of going on the market.
Newport Apartments underwent some capital outlay rehab work prior to going up for sale. The seller has only recently picked up the property from a bank. The complex reportedly had management issues and reverted to bank ownership due to non-payment. After acquisition, Black Warrior contracted Reliant Property Management, which specializes in streamlining distressed assets. The company quickly smoothed out previous issues and the asset is now projecting a 14 percent cap rate—double what similar assets boast.
In other multifamily news, preliminary construction work has kicked off at the 440 on Third, one of the most anticipated projects in Baton Rouge, reports The Times-Picayune. The eight-story building will first undergo internal demolition such as knocking out some of its internal walls. Some of the demolition byproducts will be reused, as the project is targeting LEED certification. The former office building is to be transformed into a mixed-use development featuring 65 one- and two-bedroom apartments with amenities such as an outdoor pool and deck, a 15,000-square-foot Matherne’s Supermarket grocery store (downtown Capital City’s first grocery store in 50 years), 50,000 square feet of office space and more than 100 parking spaces. DNA Workshop (Dyke Nelson Architecture LLC) is acting as developer and architecture company, while Buquet & LeBlanc Inc. is general contractor. The asset was purchased in mid-2013 for $4.3 million by a group of local investors headed by David Weinstein, a Baton Rouge financial adviser at Merril Lynch and Dyke Nelson, owner of DNA Workshop. The grocery store will open during fall 2014, while the residential component is expected for January 2015.
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Image courtesy of the Downtown Development District