RICHMOND, VA — Capital Square, one of the nation’s leading sponsors of tax-advantaged real estate investments and a developer of mixed-use multifamily communities, announced that they have completed initial lease-up and stabilization, closed permanent financing, and made a special distribution to investors in CSRA Opportunity Zone Fund II, LLC, a 58-unit mixed-use multifamily property in Richmond’s Scott’s Addition qualified opportunity zone.
Located at 2900 West Clay St., “VIV” is a five-story class A apartment community that includes 1,960 s/f of ground-level retail space. Construction on the highly anticipated property began in January 2021 and was completed in June 2022. Within three months of completion, the property achieved initial lease-up and stabilization, with occupancy exceeding 95%. With the project stabilized, Capital Square closed permanent financing with a long-term loan made by USAA Life Insurance Company. Finally, Capital Square has made a special distribution to investors as contemplated in the offering documents for the fund.
“In less than two years, Capital Square delivered its second opportunity zone development to the market, delivering much needed housing to the residents of Richmond,” said Whit Huffman, co-chief executive officer. “We identified the Scott’s Addition neighborhood as an ideal location for the development of quality multifamily projects in 2019 and are thrilled to see the proof of concept provided by the success of our first two fully stabilized projects, with the third on track for initial monetization next spring.”
VIV is the second of three Capital Square development projects that constitute Scott’s Collection, a group of boutique multifamily communities within Richmond’s thriving Scott’s Addition neighborhood. “INK,” the first of these projects, opened to residents in January of 2022 and achieved 100% occupancy shortly thereafter. INK and VIV are commanding some of the highest rents in the neighborhood.
The offering documents for CSRA Opportunity Zone Fund II, LLC contemplated a special distribution to investors upon stabilization and permanently financing the property. Capital Square is pleased to report that the special distribution was made in October, well in advance of the 2026 due date for investors’ taxes.
“Despite construction cost volatility and procurement challenges from the pandemic, Capital Square has now delivered two exceptional multifamily projects in just three years,” said Louis Rogers, founder and co-chief executive officer. “This is a superb result for the firm’s opportunity zone investors. Also, the new multifamily projects are helping to relieve the shortage of quality housing along with revitalizing the historic Scott’s Addition neighborhood.”
In addition to VIV and INK, Capital Square currently has three other multifamily developments in various stages of development in the Scott’s Addition opportunity zone that will deliver more than 770 luxury apartment homes in the coming years. These projects include GEM, the remaining Scott’s Collection multifamily project, which is currently pre-leasing and opening to residents later this year. Also included is The Otis, a 350-unit joint development with Greystar, that is expected to complete its first phase of construction during the fourth quarter of 2022, and 2950 W. Marshall Street, a mixed-use development that will deliver an additional 350 class A apartment homes in 2025.
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