$15.1 million Manchester apartment project gets an offer

A new 102-unit apartment project in Richmond’s Manchester area that was listed for sale at 8 a.m. on Monday morning at $15.1 million already had drawn an offer by Monday afternoon. 

“A strong local buyer already has set up a meeting and sent in a first offer,” said Bruce Milam, a senior vice president with Colliers in Richmond and Norfolk, who is representing the seller along with Colliers broker Jackie Noel. He would not disclose the buyer’s identity or the offer price, citing confidentiality.

A couple of New York City firms represented by local brokers also have expressed interest, Milam said. The dash to get their hands on a brand new apartment building with tenants is testimony to the high demand for Manchester’s multifamily projects, he added. 

The 55,586-square-foot building, which opened recently at 500 Hull Street, is known as PortRVA. The developer is Property Results, a Richmond-based firm run by principals Sam McDonald and Mark Scordo that has done other projects in Manchester. There’s still some work underway on PortRVA, including a swimming pool, which is supposed to be ready by the spring. The complex also offers a parking garage, rooftop terrace, fitness center and a 2,930-square-foot convenience store. 

Manchester in South Richmond is popular for apartments, says Milam, because it’s close to the James River and minutes away from downtown and Shockoe Bottom via the 14th Street Bridge. Plus, it doesn’t have some of the parking and noise issues of the entertainment district in and around Shockoe Bottom.  Plus, this is a good time for the developers to sell, because cap rates are low, about 5.75 percent on this project, which Milam said is one of the lower cap rates in Richmond. The cap rate refers to what an investor would expect the return to be on the building's net operating income. “Investors are reaching, and they are grabbing properties while they can.” 

Of the 102 units at Port RVA, 98 of them are studio and one-bedroom units; the remaining four units have two bedrooms, Milam said. A typical unit ranges from 520 to 530 square feet and rents for $800 to $900 per month. That’s a lower rate, Milam says, than for larger units in other new apartment projects in Manchester, which rent for as much as $1,200 for a one-bedroom.

In the past, Milam said Property Results has learned that one-bedroom and studios are the company’s best sellers. “A lot of the young people would just as soon not entertain in their apartment,” he said.  “They use it as a place to drop their coat and hat. They prefer to go to a community space, say a terrace space … to do their socializing outside of the house.”

Most of the tenants living at PortRVA are millennials in their 20s and 30s, according to Milam, along with a few people in their 60s.