Multifamily investment firm Magma Equities in joint partnership with Henley Investments has closed on its second apartment acquisition in the Raleigh, NC metro in the past three months, with the $26 million off-market purchase of Chapel View Apartments, a 224-unit community in Chapel Hill. 

For the past three years, the 18-acre garden-style community located at 2701 Homestead Road, two miles north of downtown Chapel Hill, had been operating as a student housing facility.    Despite its proximity to the University of North Carolina, the property had suffered from higher than market vacancy.  This created a value add opportunity to reposition the property as a traditional market-rate apartment community that will help meet the demand for quality affordable rental housing in the area; the result of the region’s impressive population and employment growth, according to Magma managing principal Ryan Hall.

“Much of the new inventory being added to the market is luxury product and cost prohibitive to most renters living in Chapel Hill,” said Hall.  “At our cost basis, we will be able to improve the property’s physical appearance and social atmosphere to create a brand new apartment community that will compete with existing Class B+ properties in the submarket, but at a price point currently unavailable in the market,” said Hall.   

Chapel View Apartments features a mix of one- and two-bedroom floorplans and boasts a variety of common area amenities including swimming pool, fitness center, basketball and tennis courts and a cyber café. 

Renovation plan includes updating building exteriors, common areas and all interiors of the one- and two-bedroom apartment homes, with such improvements as new stone countertops, stainless steel appliances, plumbing and lighting fixtures, and flooring. 

Since entering the Raleigh/Durham multifamily market in February 2019, Magma Equities and its capital partners have invested nearly $90 million in the region, building a portfolio of approximately 700 units. 

“As we develop a track record here in the Triangle, we continue to see more off-market opportunities that allow us to circumvent the competitive bidding environment for listed properties in the Raleigh market,” added Hall.   “This contributes greatly to our ability to buy below replacement cost and create value for both our investors and our tenants.” 

Garrett Solomon, Managing Director and CIO of Henley Investments’ North American group added, “We see tremendous opportunity in the Raleigh multifamily market and we’re excited to work with Magma to expand our successful value-add repositioning strategy. As we continue to provide accessible housing options for the local workforce.” 

Ownership has engaged Pinnacle Management, the third largest property management firm in the U.S. to manage the property.  

Deaton Investment Real Estate represented the buyer in the transaction. 

Henley Investments, a leading private equity real estate firm based in the UK and the USA in partnership with multifamily investment firm Magma Equities have acquired a 199-unit garden apartment community in Raleigh, NC, kicking off their residential portfolio acquisitions in the Southeast US housing market. 

Arbor Crest features a mix of one- two- and three-bedroom floorplans  up to 1,000 square feet spread over 27 residential buildings on a 24-acre site.    Located just six miles north of downtown Raleigh, the community is close to daily need shopping, restaurants, entertainment, sports venues.  It is within an easy drive of the campuses of NC State University, UNC Chapel Hill, Duke University, as well as Triangle Town Center and Raleigh-Durham International Airport. In addition to its garden apartments, Arbor Crest offers townhomes with up to three bedrooms and 1,320 square feet of living space.  Arbor Crest is an amenity-rich community with swimming pool, bbq grill, picnic areas and a children’s playground. 

“This is a sought-after North Hills address, and we are happy to bring it into the fold of Henley’s modernized multi-family apartment properties,” said Henley CEO Ian Rickwood.

Garrett Solomon, Henley’s Chief Investment Officer for their North American market, agrees. “Raleigh is a sophisticated city, and people here want a property that is up-and-coming and comfortable, but still affordable. Arbor Crest provides exactly that, and Henley is proud to be part of the local Raleigh landscape.” 

Henley and Magma’s planned refurbishments at Arbor Crest include new design for all common areas, updated landscaping, pool upgrades and individual apartment restyling. New amenities will include a clubhouse and fitness center, outdoor kitchen, dog park and a hammock area.

This is Henley’s first strategic partnership with Magma Equities, which, as operating partner will oversee the renovation.   A Los Angeles-based, vertically integrated real estate investment firm, Magma Equities specializes in the acquisition and repositioning of value-add Class B apartment communities throughout the United States.   Arbor Crest is the second multifamily investment for Magma Equities in the Raleigh/Durham MSA this year.  

“Magma sourced this acquisition off-market, directly from the original owner who has managed the asset for the past 40 years,” added  Magma Equities Managing Principal Ryan Hall.  “The property is in excellent condition, but with some modern upgrades and professional management Arbor Crest could be top of its class and draft off the impressive development that is occurring in North Hills.”