L5 Investments Makes $23M Debut in Richmond

The multifamily investment firm and its partner have made its first acquisition in Virginia, with plans to complete a more than $2.6 million renovation of the property.
Aspen Station Apartments in Richmond, Va.

Aspen Station Apartments in Richmond, Va.

Sacramento, Calif.—L5 Investments, together with BH Equities, has purchased the 232-unit Aspen Station Apartments for $22.9 million in Richmond, Va. The acquisition marks L5 Investments first property in the state of Virginia.

The seller was South Carolina-based Bell Partners, which originally purchased the property in 2008 for $18.7 million.

The partnership plans to invest more than $2.6 million for an extensive renovation of the garden-style community located at 1500 Forest Run Drive. The 17.1-acre property was built in 1980 and currently offers a swimming pool, clubhouse, lighted tennis and basketball courts, car wash and vacuum station, and picnic area with grills. Units include 98 one bedrooms, 116 two bedrooms, and 18 three bedrooms, each with a full-size washer and dryer as well as a private balcony or patio.

As of August 2015, the average unit size was 770 square feet and average rental rate was $924, with occupancy at 94 percent, according to Richmond BizSense.

The extensive renovation will include: a complete remodel of the leasing and business center; remodel of the fitness center to double its size and include state-of-the-art equipment; interior upgrades to flooring, cabinets, counters, lighting, fixtures and appliances; upgrades to landscaping, tennis and basketball courts; the addition of a sports court and dog park; and a new monument and directional signage.

“There is a significant amount of obsolete apartment units in the area. We believe this opportunity to renovate and reposition this asset to offer modern spaces will help meet the demands of today’s local residents. It also has great access to Interstate 95 and is surrounded by a number of successful business parks,” Michael Flaherty of L5 Investments told MHN.

BH Equities will manage the property through its property management arm, BH Management Services.

“Although we have numerous apartment assets in growing areas throughout the country, this acquisition marks L5 Investments’ first in the State of Virginia,” said Michael Flaherty, founder & managing partner of L5 Investments, a Northern California-based multifamily investment firm. “By partnering with BH Equities, an experienced investor and asset manager with strong local market experience, we believe we can raise the bar for Aspen Station and attracting new residents who are seeking a high-end apartment community with quality interior spaces, amenities and proactive management.”

BH Equities currently manages six properties totaling almost 2,000 units in the Richmond market.

Berkadia Commercial Mortgage’s Laura Cathlina provided the debt for the transaction, while Wink Ewing of ARA Newmark represented both the buyer and seller.

In addition to pursuing acquisitions in Richmond, L5 Investments is also looking for opportunities in the Hampton Roads submarket, which has “a growing job market and a need for quality apartment units,” Flaherty said.