Baltimore-based real estate investment and management company Continental Realty Corporation (CRC) has purchased its seventh multifamily community in North Carolina with the recent $36.5 million acquisition of 800 St. Marys Apartments, located at 800 St. Marys Street in the Glenwood South neighborhood of downtown Raleigh. Developed in 2020 by Selwyn Property Group and Southeast Apartment Investors, the 65-unit community of four-story elevator-serviced building and townhomes with attached garages was 95 percent leased at the time of this off-market transaction. Dean Smith of Newmark represented the seller. Adam Randall and John Westby-Gibson of Newmark provided services to procure the financing through a loan with the Federal Home Loan Mortgage Corporation (Freddie Mac).
This is the first asset purchased on behalf of Core Multifamily Fund, LP, private equity fund sponsored by CRC, in partnership with Brown Advisory, a global private and independent investment and strategic advisory firm also headquartered in Baltimore. The Core Multifamily Fund recently completed its initial Founders Investor Closing, raising approximately $145 million. The fund was formed to identify and acquire Class “A” garden and mid-rise communities located in the southeastern United States, with top-quality finishes and amenities, with a focus on stabilized or near-stabilized opportunities. Through its various funds, CRC has acquired approximately $1.2 billion worth of retail and multifamily assets in the last ten years. In total, CRC owns and self-manages roughly $3.2 billion in real estate nationally, with heavy concentration in the Southeast.
At 65-units, this boutique product integrates well into Continental’s existing portfolio. 800 Saint Marys is located just 0.2 miles from the nearest CRC asset. With this acquisition, CRC now owns and self-manages more than 1,300 apartment units in North Carolina, with four multifamily communities in the Raleigh area, including The Edison Lofts, St. Mary’s Square, The Village Apartments and 800 St. Marys Apartments. Additional assets include The Flats at Ballantyne and Park & Kingston located in Charlotte and The Reserve at Mayfaire in Wilmington.
One- and two-bedroom units are among the largest within the Glenwood South submarket
Delivered in 2020, 800 St. Marys Apartments is in Raleigh’s Glenwood South district and consists of one-, two- and three-bedroom floorplans ranging from 963 to 1,666 square feet of space, with an average unit size of 1,224 square feet of space. The 19 one-bedroom units, measuring 963 square feet of space, are approximately 25 percent larger than comparable product in the submarket, and the 42 two-bedroom units, at 1,283 square feet of space, are 10 percent larger than the competitive set. The four three-bedroom townhome-style units with direct-entry two-car garages consist of 1,666 square feet of space.
Each unit features 10-foot ceilings, a stainless-steel appliance package, quartz countertops, soft-close kitchen cabinetry, kitchen islands with bar top seating, extra large closets and walnut plank flooring. Existing community amenities include an outdoor terrace with summer kitchen area, fire pit with seating, a state-of-the-art fitness center, a clubhouse equipped with flat screen televisions, wine lockers, and a complimentary coffee bar, a business lounge with private conference center, and a controlled-access parking garage.
Nearby retail, entertainment and cultural options
Situated two blocks off Glenwood Avenue, 800 St. Marys Apartments features quick access to Glenwood South’s retail and entertainment, such as Cameron Village, Harris Teeter, and Publix Supermarket. Also nearby are North Carolina State University and William Peace University, Yates Mill Park and William B. Umstead Park. Downtown Raleigh is less than two miles away and Raleigh-Durham International Airport can be accessed in less than 15 minutes.
“800 St. Marys Apartments is an institutional-quality asset and we were drawn by its irreplaceable location, expansive floorplans and best-in-class finishes and amenity package,” stated Ari Abramson, CRC’s Vice President of Acquisitions. “CRC is the natural buyer for this asset, given our existing three multifamily communities in the Raleigh market, including St. Mary’s Square. This provides our team the opportunity to scale operations between the two properties to realize cost efficiencies, and to expand the breadth of amenities to 800 St. Marys residents by providing access to St. Mary’s Square amenities including its rooftop pool.”
CRC acquired the 134-unit St. Mary’s Square in 2018 and completed a $1.2 million renovation in 2021, improving the asset’s common areas and amenity spaces.
Sustained vibrancy and growth of Raleigh
“Our team has a deep understanding of the key growth drivers, population trends, and market conditions through the Southeast markets. We have been focused on these markets for decades, which gives our acquisition and management platform scale and expertise” stated JM Schapiro, CRC’s CEO. “As multifamily real estate performance strongly correlates with population and job growth, the fundamentals of Raleigh are exceptional and 800 St. Marys is great real estate. With the long-term investment profile of the Core Multifamily Fund, this is a perfect first deal for this fund.” Schapiro added.
The population of Greater Raleigh grew nearly 3.3 percent over the past year and now stands at nearly 1.6 million people. Major employers in the region include Red Hat, Duke Energy, Wells Fargo, Deloitte, KPMG and Citrix.
According to information published by Wake County Economic Development, GoBanking Rates named Raleigh the number one city to live in for young professionals, based on affordability and the strength of the local labor force, and The Triangle area (Raleigh-Durham-Chapel Hill) is considered the second-fastest growing tech hub, with more than 4,000 tech companies employing more than 60,000 workers. The region, with approximately 600 life science companies, is considered the fifth-largest life sciences hub in the country.
Overview of $144 million Core Multifamily Fund
Core Multifamily Fund, CRC’s seventh fund, is focused on acquiring newly-developed properties constructed between 2018 and 2022 in high-growth suburban and urban markets throughout the Southeast, including Charleston, Charlotte, Nashville, Raleigh, Orlando and Tampa.
“Given our deep understanding of the Southeast markets and current market conditions, especially the job and population growth in the Southeast, our vertically integrated team believes this is the optimal time to invest in a core multifamily strategy for long-term holds,” said Schapiro. “Multifamily real estate performance correlates positively with population and job growth, and by investing in high-growth markets, this fund will benefit from submarket growth that is stronger than the national average.”
