(To read more on the multifamily market, click here.)
NEWPORT NEWS, VA-Texas based TVO River Park Partners LP has sold its sole holding here to Boston-based Berkshire Property Advisors for $14.7 million. The multifamily property, called River Park Tower, is a 184-unit, 19-story building located Downtown.
The building, which was built in 1984, consists of one, two and three-bedroom units that range in size from 700 sf to 2,016 sf and was 92.5% occupied when the sale closed. Located at 2601 West Ave., the property is near the Northrup Grumman Newport News Shipyard and the Monitor-Merrimac Bridge Tunnel.
CB Richard Ellis' Dan Johnson in Norfolk and Andrew Boyer in Washington, DC represented the seller.
Johnson tells GlobeSt.com that Berkshire believes there is significant upside in the building as the Downtown area revitalizes. "Downtown Newport has been stagnant for many years. It is now showing signs of growth. There is a new federal court house under construction and new Navy housing coming to the neighborhood. This will lead to more people wanting to live Downtown."
He also notes that vacancy rates in the submarket have dropped considerably since 2004. In April of that year they were as high as 9.4%. By 2005 they had fallen to 4.2%.
Tighter management of the building is also expected to deliver more value add, Johnson adds. During that same high growth period, River Park Tower's rent grew at a 1.5% rate, compared to the MSA's average rate growth of 5%.
Berkshire entered the market in 2004 with a four-asset, 729-unit acquisition for $45 million, according to Johnson. It has since acquired an additional 550 units here, he says. Its presence and experience with the market is one reason why it believes it can squeeze out additional value from the building.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
