Dees Stribling, Contributing Editor
Stamford, Conn.–RiverOak Investment Corp., a private investor, and RMS Construction have formed a joint venture to begin work on the St. Andrews Apartments in downtown Stamford. The 94-unit, four-story apartment building will be built on land owned by St. Andrews, an Episcopal church in Stamford, under a lease-purchase deal with RMS, headed by developer Randy Salvatore, that will provide the church a monthly income of $20,000 for the next eight years.
The project received a green light from a Connecticut Superior Court earlier this year when the court ruled that St. Andrews could tear down its rectory to build the apartment building. A preservation group had sued to stop demolition of the 19th-century Gothic structure, which the church said that it could not afford to maintain.
According to RiverOak, this is a good time to invest in multifamily development in a place like Stamford. “With Stamford’s emergence as a center of finance, as evidenced by UBS and more recently RBS establishing their U.S. Headquarters in Stamford, multifamily housing–particularly in the downtown core–has been in great demand,” George Yerrall, managing director of RiverOak, tells MHN. “Stamford’s transformation to a hip place to live has only enhanced the market dynamics.”
The St. Andrews Apartments represents the third development that locally based RiverOak and RMS Construction, a development, construction and marketing company also headquartered in Stamford, have partnered to complete. Previous projects they collaborated on include 170 condominium units on Camp Ave. in Stamford and 36 condo units with first-floor office space on the Norwalk River in Norwalk, Conn. RMS also co‐developed two other downtown Stamford apartment projects on Prospect Street and Forest Street, which the developer says gives it valuable user data for apartment leasing in the area.
RiverOak’s investments primarily take the form of “gap equity” to fill the last “gap” to complete development deals. Gap equity is usually represents a fraction of a transaction’s total capitalization, but it frees up the developer’s funds for other projects. RiverOak funds invest in gap equity positions of $2 million to $6 million per transaction in deals that are typically in the $8 million to $50 million range, and are mainly located in the Boston-to-Washington corridor.
The investment in the St. Andrews Apartments marks the fifth investment in RiverOak Fund IV, a $26 million value-added real estate fund that RiverOak formed and sponsored in June 2007. The diversified real estate fund’s main investors are high net worth individuals, and its investment mix includes office, light industrial, residential, student housing and retail properties.