SBV Buys Lexington Commons, Fourth M-F Purchase in Greensboro, NC

By Gail Kalinoski, Contributing Editor

SBV Communities has entered the Greensboro, N.C., multi-family market in a big way in a short amount of time. The Kansas City, Mo.,-based firm has purchased more than 600 multi-family units in four acquisitions, including Lexington Commons, the most recent addition to the portfolio.

Lexington Commons is a 106-unit apartment complex located just north of the city’s downtown. SBV Communities, formed in 2009 by private investment firm Spectrum Business Ventures to acquire and manage multi-family real estate properties, closed on the purchase June 26 and announced the deal last week.

“Our recent experience in Greensboro has made us pretty bullish on the city,” Chris Thomson, director of multi-family acquisitions for SBV Communities, said in a news release “We believe we will be able to add and derive significant value from our purchases. Lexington Common is no exception. We expect our activity level to continue and are actively seeking additional opportunities.”

SBV Communities entered the Greensboro market, part of the Piedmont Triad, which includes Winston-Salem and High Point, with the purchase of Misty Creek Apartments, a 268-unit apartment community. It was the 16^th market for the firm, which also has multi-family holdings in Texas, Tennessee, South Carolina, Kansas, Indiana, Georgia and Arkansas. Misty Creek was the first North Carolina purchase for SBV Communities.

“Our research put Greensboro on our radar for quite some time. The economics are favorable, the state offers many building and lifestyle advantages and the growth rates in key sectors fit our profile,” Thomson said in a June 27 release. “With few units becoming available, we think this is a really smart market to add to our portfolio.”

Just one day after announcing the Misty Creek acquisition, SBV Communities said it had purchased Aspen Woods, a 158-unit apartment complex located across the street from Misty Creek Apartments.

Thomson cited “an opportunity to create synergies, which will result in expense reduction and operational efficiencies,” in announcing the Aspen Wood acquisition.

Three days later, SBV Communities said it had made its third acquisition in Greensboro with the purchase of Wendover West, a 177-unit apartment community located across the street from Misty Creek Apartments and Aspen Woods.

Thomson said in a July 1 release that the “deal just made sense. We are essentially adding 177 units to an existing infrastructure.”

He added that operating them as one would “amplify our value-add opportunities and magnify our cost savings.”

SBV Communities did not release acquisition costs for the four properties or the names of the sellers.

The company said Greensboro is diversifying its economic base, which in the past was dominated by tobacco. The headquarters of Lorillard Tobacco Co. is in Greensboro. Other companies with major operations there include FedEx, Mack Trucks and RF Micro Devices. It is also home to several colleges and universities.

Real Data, an apartment research firm in Charlotte, N.C., said in its April market report that the average vacancy rate for apartments in the Triad region was 8.3 percent, compared to 13.9 percent in 2009. The firm expects vacancy could fall to 7 percent in the coming year and average rents could climb about 3 percent from its current average of approximately $700. Real Data said newer communities get about $870 per month in rent.

New development of multi-family housing is described as modest, with construction starting on less than 500 units within six months, the April report stated.

In March, SVB Communities announced it had entered the Columbia, S.C., market with the purchase of the 332-unit Quail Run Apartments. The multi-family community is located on 42 acres and has lofts, garden-style apartments and town hones with one-, two- and three-bedroom units. The purchase price was not released.