BRG Invests in 245-Unit Luxury Community in Raleigh
- Jan 19, 2016
Raleigh, N.C.—Bluerock Residential Growth REIT Inc. recently announced its investment in a joint venture to acquire and develop a luxury apartment community in Raleigh, with development costs estimated at approximately $40 million.
Villages at Lake Boone is a Class A luxury community featuring 245 units on a 7.3-acre property in the northwestern part of the city. The new community will offer studio, one-, two- and three-bedroom apartments of approximately 821 square feet designed to target professionals working in the adjacent REX hospital, which employs a staff of approximately 5,400. Community amenities include a resort-style swimming pool and fitness center, as well as business and media centers and surface parking.
“The Raleigh-Durham market is among the most vibrant economies in the country and we are pleased to be expanding our portfolio of holdings in the area,” said Ramin Kamfar, CEO of BRG. “Our relationship with TriBridge and innovative deal structuring made it possible for us to acquire the Villas at Lake Boone property at the seller’s original cost basis, which we expect will enable the Venture to bring a luxurious and well-constructed product to the market at a highly favorable cost basis and yet draw very attractive rents.”
Bluerock’s underwriting projects a return on cost of approximately 7.1 percent at stabilization, based on expected development costs and projected rental income. This compares favorably to estimated market cap rates of 4.75 -5.25 percent for comparable product in the Raleigh market.
Image courtesy of Villages at Lake Boone