Capital Square Lands Financing for Richmond Community
August 30, 2022 | Jackson Chen | Multi-Housing News
Capital Square has secured long-term financing for its recently completed community in Richmond, Va., that has already been fully stabilized. The developer landed a seven-year term loan from USAA Life Insurance Co. for its Class A multifamily community INK.
With the financing in place, investors of the CSRA Opportunity Zone Fund I that was specific to the project will get a special distribution that’s a 53 percent return on investment. Capital Square initially projected that the special distribution would total a 36 percent return on equity, but the increase was attributed to the strong performance of the community.
Capital Square began construction on INK in the second quarter of 2020 and completed the community in January 2022. The 80-unit community offers one- and two-bedroom units ranging from 585 to 1,130 square feet. Amenities at INK include a pool, a resident lounge, an entertainment kitchen, a bar, a courtyard terrace, a fitness center, coworking spaces and nearly 2,000 square feet of ground-floor retail space.
Capital Square was able to get INK to 100 percent occupancy approximately five months after completing the community. Located at 3000 W. Clay St., INK was built in a qualified Opportunity Zone in Richmond’s Scott’s Addition neighborhood. Whit Huffman, chief strategy and investment officer at Capital Square, said in prepared remarks that the Scott’s Addition neighborhood is becoming one of the city’s most popular and is seeing rising demand and high occupancy rates.
A Trio of OZ Communities
Along with INK, Capital Square is working on two other communities that are part of Scott’s Collection. The developer completed construction on VIV in July and is currently in the process of leasing the community up, while GEM is currently in preleasing and is expected to open to residents in the fall. Outside Scott’s Collection, Capital Square has partnered with Greystar to construct The Otis, a 350-unit residential development. The partnership is expected to complete the first phase of construction in the fourth quarter of 2022.
In total, Capital Square still has three multifamily developments under construction in the Scott’s Addition Opportunity Zone. The remaining projects total 559 units and are expected to be delivered by 2023. Capital Square’s latest Opportunity Zone fund, the CSRA Opportunity Zone Fund VII, is also funding the development of a three-building multifamily project totaling 350 units near Scott’s Addition. Beyond its Opportunity Zone funds, Capital Square also recently launched its first multifamily fund in May, which will focus on projects in the Mid-Atlantic and Southeast U.S.
