Goldstar Closes on Fractured Condo Deal in Virginia
- Oct 08, 2012
Charlottesville, Va.—The Goldstar Group has acquired 265 rental condo flats and townhomes at Barracks West in Charlottesville, Va., for $13.3 million in an off-market sale. Located near the University of Virginia’s business and law schools, the Barracks West units were placed in receivership by Suntrust Bank in late 2011.
Goldstar affiliate Metropolis Capital Finance sourced debt capital for the transaction. The financing included about $15 million of senior and mezzanine debt, with the balance of the capital stack funded with equity.
Goldstar plans to spend $4.5 million on renovations including common area improvements, exterior building and parking lot repairs, landscaping, and improvements to the community clubhouse. A number of units, some of which are unoccupied and others that have been rented at below-market rates, will be upgraded with new paint, carpeting, appliances, lighting, new heating and cooling systems and water heaters.
Originally developed in 1969, Barracks West Condominiums comprises 34 buildings on over 19 acres. Its 364 residential units range from efficiencies to three-bedroom apartments and townhomes. Cheetah Investments LLC of Charlottesville acquired the property from AIMCO in 2006 for $31.6 million.
In 2007, Cheetah began converting the community to condo ownership, and sold 99 units at an average price of about $130,000. Ultimately, however, the real estate market crash caused sales to slow until the ownership defaulted on its $22 million loan.
The deal marks the fifth fractured condo acquisition that the Goldstar Group has closed in the last three years. In one of the Washington, DC, metro area’s largest-ever residential note sales, Goldstar acquired a $45 million mortgage on 86 unsold units at Floridian Condominiums for $22.6 million in January 2010, and has since sold all but three of those units. In August 2011, Goldstar paid $7 million for the remaining 65 units at Rosewood Condominiums in Gaithersburg, Md., in the wake of Lehman Brothers’ bankruptcy.