Richmond Bizsense Feature | Developer lined up for $34M apartment project near VUU
Shopped around after an initial contract fell through, a multimillion-dollar project that’s set to add hundreds of market-rate apartments near Virginia Union University has secured the same buyer as before, a NoVA-based firm making its entry into the Richmond market.
MVP Equities, a private equity firm based in McLean, is under contract to develop the now-named Sphere Apartments, a 224-unit complex planned for a site between the Brook Road post office and adjacent Spectrum apartments, across the street from VUU’s football stadium.
The development would replace a U.S. Postal Service warehouse on the site.
The deal, which was signed early this month, is set to close in late October, with construction scheduled to start the following month. MVP CEO Kevin Palka declined to disclose the purchase price or other terms of the deal until closer to closing.
Palka, whose firm focuses on multifamily investment properties in the Mid-Atlantic, said the project is MVP’s first in Richmond. Its investment portfolio includes properties in Northern Virginia and North Carolina, according to the firm’s website.
Palka said he’d been in talks for the project since last August and initially had it under contract in December, but that deal fell through. He said circumstances surrounding COVID-19 caused the contract to expire, prompting him to step back and reassess the project while it was put back on the market.
After completing a due diligence period that he said lasted over six months, Palka said a new contract was signed July 2.
“The owner was courteous enough to give us enough time to really search through the project, make sure that the project was going to fit, that we’d be able to execute on it,” Palka said. “We spent a lot of time making sure the demographics work, seeing how this project could improve the neighborhood.
“Obviously this project is located right near VUU, not far from VCU, so there’s a lot of good opportunities to provide a good, affordable product to the marketplace,” he said.
JLL agent Danny Holly brokered the deal for property owners Ray and Kim Kidd, who purchased the site in 2011 for $635,000, property records show. The couple, who own Chesterfield-based real estate firm Kidd & Co., made the purchase through an entity called W Brook Road LLC.
The latest city assessment valued the property, which consists of two parcels at 2009 Brook Road and 2011 Northumberland Ave., at $1.51 million combined.
$34 million project
Totaling 185,000 square feet, Sphere Apartments is planned to consist of 37 studio apartments, 90 one-bedroom units with one bathroom, and 73 two-bedroom, two-bath units. Palka said monthly rents would range from $950 to $1,400.
“Even though it’s not designated as student housing, it’s going to be an affordable product for everybody,” he said.
The garden-style apartments would fill two four-story buildings with elevators, with amenities including a pool, fitness center, dog park, bike maintenance facility and on-site storage. The project also would include a parking lot with 301 spaces free to residents, as well as 21 covered spaces that can be rented for $65 a month, according to MVP’s website.
Palka said MVP likely would build the apartments, retaining designs by Virginia Beach-based architect Cox, Kliewer & Co., one of several firms tied to the project when it went through the city’s permitting process.
Civil engineer Kimley Horn likewise remains involved, while contracting firm Loughridge & Co., which assisted with securing a needed special-use permit, is not, Palka said. He said it’s unclear whether Newport News-based Drucker & Falk remains on board to manage the property.
Palka put the project cost at about $34 million, $2 million higher than a previous estimate. He said he’s aiming for completion in the first quarter of 2022.
The apartments will rise a block away from another development in the works for the neighborhood: VUU’s planned campus expansion at the former Budget Inn of Richmond motel at Brook and Lombardy streets. A VUU spokeswoman said the university did not have any updates to provide on that project.
Noting such investment in the neighborhood, Palka said, “That’s what we like about this (project) and this area, that it’s up-and-coming and you’re right near the university. Brook Road is transforming every day.”