Capital Square’s First Opportunity Zone Development Achieves 97% Occupancy Just Months After Completion
May 31, 2022 | Capital Square
Capital Square, one of the nation’s leading sponsors of tax-advantaged real estate investments and an active developer of mixed-use multifamily communities, announced today that their inaugural development project, an 80-unit Class A multifamily property in Richmond, Virginia, has achieved 97% occupancy just over four months after opening its doors to residents.
Dubbed “INK,” the 80,000-square-foot property, which includes 1,939 square feet of ground-level retail space, was built in a qualified opportunity zone in the emerging neighborhood of Scott’s Addition. INK is the first of three development projects of Scott’s Collection, a group of boutique multifamily communities within the Scott’s Addition neighborhood. Construction on the property began in the second quarter of 2020 and was completed in February 2022.
“The quick lease-up of this property has exceeded our expectations but is not surprising given the exceptional quality we’ve delivered with INK to the increasingly popular Scott’s Addition neighborhood,” said Whit Huffman, chief strategy and investment officer. “Demand for quality housing in this emerging part of Richmond is very high, and Capital Square is working hard to help satisfy that demand with this project, as well as the four other multifamily properties we have in various stages of development throughout the neighborhood.”
Development of INK at Scott’s Collection was primarily funded with proceeds from Capital Square’s first qualified opportunity zone fund, CSRA Opportunity Zone Fund I, LLC. Capital Square has subsequently launched a total of seven qualified opportunity zone funds, including CSRA Opportunity Zone Fund VII, LLC, which seeks to raise $41.4 million from accredited investors to fund the development of an additional luxury multifamily development in the Scott’s Addition neighborhood. Capital Square’s successfully raised opportunity zone funds to date have initiated over $300 million in development value.
Located at 3000 – 3008 Clay Street, the five-story INK features a number of one- and two-bedroom floorplans ranging in size from 585 square feet to 1,130 square feet, private balconies and attractive community amenities, including a pool courtyard and outdoor lounge with fire pit and grill stations. As the market leader, INK’s current in-place and asking rents equal $1,718, or $2.46 per square foot. The property is managed by Greystar Property Management.
In total, Capital Square currently has four multifamily developments under construction in the Scott’s Addition neighborhood that have delivered or will deliver 559 luxury apartment homes by 2023, with another 350 units planned for the neighborhood. These projects include VIV and GEM, the remaining two Scott’s Collection multifamily projects, which are currently pre-leasing and will welcome residents in the coming weeks. Also included is The Otis, a 350-unit joint development with Greystar that is expected to complete its first phase of construction during the fourth quarter of 2022.
Once a hub for industrial buildings and businesses, Scott’s Addition is one of Richmond’s fastest growing and vibrant neighborhoods, with a plethora of entertainment and dining options in the walkable neighborhood. The area includes over 13 breweries, cideries, meaderies and distilleries, is home to nationally recognized cinema, a shuffleboard bar, retail shops, and more. Convenient access to Interstates 64, 95, 195 and the Powhite Parkway have also led to a growing number of employers choosing to relocate or open new offices in the neighborhood. Scott’s Addition is considered the number one “millennial hot-spot” in Virginia, with a 43% increase in millennials in just five years, according to RENTCafe. Scott’s Addition’s apartment rental rates are projected to increase 3% to 4% per year for five years and is the second-highest performing market in Richmond, according to Yardi Matrix.
Opportunity zones were created to stimulate long-term private investments in low-income urban and rural communities nationwide. Conceived as part of the Tax Cuts and Jobs Act of 2017, opportunity zone funds are intended to help foster economic growth by providing tax benefits to incentivize private investments in designated opportunity zones.
About Capital Square
Capital Square is a national real estate firm specializing in tax-advantaged real estate investments, including Delaware statutory trusts for Section 1031 exchanges, qualified opportunity zone funds for tax deferral and exclusion and a real estate investment trust (REIT). In recent years the company has become an active developer of multifamily properties in the southeastern US, with eight current projects totaling approximately 2,000 apartment units with a total development cost in excess of $600 million. Since 2012, Capital Square has completed more than $5.6 billion in transaction volume. Capital Square’s related entities provide a range of services, including due diligence, acquisition, loan sourcing, property/asset management, and disposition, for a growing number of high-net-worth investors, private equity firms, family offices and institutional investors. Since 2017, Capital Square has been recognized by Inc. 5000 as one of the fastest growing companies in the nation for four consecutive years. In 2017, 2018 and 2020, the company was also ranked on Richmond BizSense’s list of fastest growing companies. Additionally, Capital Square was listed by Virginia Business on their “Best Places to Work in Virginia” report in 2019 and their “Fantastic 50” reports in 2019 and 2020. To learn more, visit www.CapitalSquare1031.com.
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