Bluerock Residential Growth REIT to Acquire 473-Unit Ashton Reserve
- May 27, 2015
Ashton Reserve, an apartment community in Charlotte’s high-end Northlake submarket, is set to change owners. Bluerock Residential Growth REIT (BRG) has announced plans to purchase the 473-unit asset.
Developed in two stages in 2013 and 2015, Ashton Reserve will also be acquired in two phase. The community’s first phase, Ashton I, is expected to trade for $140,700 per unit, and Ashton II for $144,500 per unit, totaling $44.76 million and $21.8 million respectively. Ashton II’s final purchase price will be set based on its in-place financial performance. BRG will assume a $31.19 million existing loan on Ashton I. The REIT also plans to secure new mortgage financing of about $15 million upon the acquisition of Ashton II.
BRG sourced the transaction through an existing operating partner that bought Ashton with a capital provider in 2013. BRG entered a purchase agreement for Ashton I, replacing the capital provider at their original basis. BRG will also enter the capital provider’s contract to purchase Ashton II at the closing of Ashton I. As a result BRG will buy Ashton I at a cap rate of 6 percent and Ashton II at a cap rate of 5.8 percent – an advantageous pricing relative to the market’s average cap rates of 5.25 to 5.5 percent. BRG also plans to make a $14 million equity investment for Ashton I and $7 million for Ashton II.
Located in Charlotte’s upscale Northlake submarket, Ashton Reserve is proximate to Charlotte’s CBD and University Research Park, two of the most prominent submarkets for business and employment in the Queen City. Amenities include fitness facilities, swimming pool, two clubhouses, business center, private media center, grilling stations, car care center, Starbucks Cyber Café and five recycling centers.
The community comprises luxury one-, two- and three-bedroom units. Ashton I features 322 units averaging 993 square feet with an effective in-place rent of $1,250 per month. Ashton II’s 151 units average 1,019 square feet. Ashton II has delivered 71 units and leased 43 as of May 14.
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Image credits: Ashton Reserve