DURHAM, NC - Bluerock Residential Growth REIT announced that its Board of Directors has approved an investment of approximately $12.3 million in a joint venture that will acquire a 204-unit Class AA multifamily project known as Whetstone Apartments. Located in a sought-after neighborhood of Durham, North Carolina, Whetstone is within walking distance of Durham's top restaurants, events and nightlife and is in close proximity to Research Triangle Park, as well as the area's many universities.
Whetstone is approaching completion with all units delivered and lease-up progressing at a robust pace. Now 27% occupied and 39% leased, Whetstone has been averaging approximately five new leases per week since early March and is projected to reach stabilization in or about the 4th Quarter of 2015. The property is under contract for a purchase price of $ 35.6 million at a nominal stabilized cap rate of approximately 6.0%.
Whetstone is a new-construction, Class AA multifamily community featuring studio, one and two-bedroom unit layouts averaging 718 square feet with upscale amenities that include a resort style pool, a garden courtyard with grill and fireplace, state of the art fitness center and covered/controlled-access parking, as well as business and media centers. High-grade unit interiors include nine-foot ceilings, gourmet kitchens with stainless steel appliances, and upscale bathroom design and finishes.
Whetstone is located in North Carolina's Raleigh-Durham MSA, home to an estimated two million residents, spanning Raleigh, Durham, Cary and Chapel Hill. The MSA, which is anchored by Research Triangle Park (RTP), North Carolina State University, Duke University, and University of North Carolina at Chapel Hill, offers fast growing technology and research-based economy with strong intellectual capital and robust job creation. The region also houses world-class medical and research facilities, led by Duke University and UNC Chapel Hill. In the last year, the Triangle region alone added more than 25,000 new jobs, while unemployment dropped to its pre-recession level of only 4.3%.
"We are very pleased to be investing in the area and in this project," said Ramin Kamfar, Chairman and CEO of BRG. "We were able to engage in the venture at a favorable price point and believe it will be a source of solid, steady value creation for our investors."
BRG's joint venture partners on this investment are Atlanta-based TriBridge Residential and an affiliate of Bluerock Real Estate, LLC. TriBridge is a full service, multifamily investment, management and development company and will also serve as property manager for Whetstone. This is BRG's second partnership with TriBridge.
Pursuant to a comprehensive letter of intent and cost sharing agreement with TriBridge, BRG and the Bluerock affiliate will invest 92.5% of the venture's equity requirement. BRG's investment with the Bluerock affiliate will be structured as a convertible preferred equity investment, providing BRG the right, after stabilization, to convert into a controlling, common membership interest in the joint venture.