Mesa West Capital has provided Knightvest Capital with $27.7 million in first mortgage debt to finance its acquisition of a 156-unit multifamily community in the Northwest Raleigh submarket of Raleigh, North Carolina. The property will be rebranded from The Lofts at Strickland Glen to Camellia Apartments.
The five-year, floating rate loan is secured by The Lofts at Strickland Glen, a garden-style community located on a 15-acre site at 12203 Strickland Road, 11 miles north of downtown Raleigh. Built in 2000 and 92% leased at closing, The Lofts at Strickland Glen features a unit mix of one-, two-, and three-bedroom apartment homes with larger average unit sizes, open-concept floorplans, personal balconies/patios, walk-in closets, and in-home washer/dryers. Community amenities include a pool, fitness center, resident clubhouse, dog park, and various outdoor lounge areas.
The community benefits from numerous demand drivers, most notably its strong connectivity to the major employment hubs of downtown Raleigh, Research Triangle Park, Durham and North Hills, which collectively employ approximately 750,000 people anchored by technology and life science industries, according to Federal Reserve Economic data. These primary commercial centers, residential communities, and employment hubs are within a 15-mile drive of the property via nearby I-540, US-70 and NC-50.
Given its strong job and economic growth, and a declining construction pipeline, multifamily demand in Raleigh has exceeded historical levels, characterized by nine consecutive quarters of positive absorption, according to CoStar. The Northwest Raleigh submarket in particular boasts the second lowest vacancy rate among all multifamily submarkets in Raleigh.
“Knightvest is a best-in-class sponsor in the value-add multifamily space, with a long track record of successfully executing on this type of business plan. Given the limited historical capital spend at the asset, Lofts is ideally suited for a repositioning strategy” said Brian Hirsh, head of Mesa West Capital’s Central Region, who led the origination team that included Jonah Sacks out of the private lender’s Chicago office.
