As completion nears of the massive Standard apartment building on Charlottesville’s West Main Street, another complex that opened two years ago recently was rebranded by the national firm that now owns it.
What had been called the Uncommon, at 1000 W. Main, is now known as Lark on Main, although some of the signage outside still carries the old name. The L-shaped building has 342 beds that are rented out on an individual basis no matter how many people live within the same unit.
“The town should view these buildings as massive investments that are bringing in a lot of tax dollars but they’re also creating housing stock by consolidating students into larger developments,” said John Pritzlaff, senior vice president at Cushman & Wakefield | Thalhimer, a Richmond-based real estate firm.
The Lark is within the city’s West Main zoning district, a classification created in 2003 to encourage density between the University of Virginia and the Downtown Mall.
There was little development activity until 2013, when work got underway on the Flats at West Village. That complex consists of 622 bedrooms and was built by the Ambling University Development Group and Riverbend Development.
“West Main has transformed into a taller, more commercial and walkable sector at a pace that has shocked some city residents,” said Ivo Romenesko, of the Charlottesville-based Appraisal Group. “I feel that development happened so fast because the demand was unmet for years, and once the Flats started construction, the rest of the market saw potential and pursued he opportunity.”
The Flats complex was sold to Madison Loft, a limited liability company, in November 2016 for $77.5 million. A search of the State Corporation Commission’s records ties Madison Loft to a company based in Singapore called Mapletree Investments.
The Flats at West Village is now managed by Asset Campus Housing, a Houston-based company.
“The financial partners often have a ‘take-out’ agreement in the deal that allows the partner to acquire ownership once the project is leased to near-threshold capacity,” Romenesko said. “This model is applied in most large student housing deals.”
The Lark on Main project was developed by CA Student Living of Chicago but was sold in April 2017 to a limited liability company known as SSC Charlottesville for $59.5 million. That company is part of the Scion Group.
The Scion Group’s partners include wealth funds GIC and the Canada Public Pension Investment Board. The purchase of the Lark on Main was part of the Scion Group’s acquisition of 11 student housing properties across the country for $640 million.
In January, the company acquired 24 more student housing complexes in the United States for an additional $1.1 billion.
In all, Scion operates “73 student housing communities in 52 top-tiered university markets, comprising 46,555 beds,” according to an announcement of the $1.1 billion transaction.
The company also operates the Village at Blacksburg, the Lark at Kohl in Madison, Wisconsin, and the Lark on 42nd in Tampa, Florida.
The Scion Group did not respond to requests for comment.
A third student apartment complex on West Main, the Standard, is under construction and is slated to open this summer. The project is being developed by Landmark Properties under an LLC called 853 West Main whose registered agent is Blake Hurt, a local developer. (Hurt’s wife, Carol, is on the board of directors of Charlottesville Tomorrow.)
According to the Lark’s website, the lowest rent there is $669 a month but requires two people to share a room in a two-bedroom unit. The highest rent is $1,599 for a one-bedroom unit. Parking in the basement garage costs an additional $150 a month.
The Lark property is currently assessed by the city at $53 million.
Pritzlaff said the high-end student apartment industry is a good business to be in.
“Obviously, there’s a need,” Pritzlaff said. “These [buildings] are proving there’s a need. They’re becoming economic engines, and that’s what the sale represents.”
Pritzlaff is handling the leasing for the commercial retail space that will be on the ground floor of the Standard, but the residential leasing is all being done by the company itself.
Pritzlaff said the 2003 rezoning is not the only factor that led to the creation of these complexes.
“There are other economic drivers that align themselves at the right time to allow it to happen,” Pritzlaff said. “We were in an environment where the zoning allowed the use and interest rates that allowed the developer to take the risk.”
Meanwhile, more development continues on West Main.
On Tuesday, ground will be broken for a 53-unit apartment complex that will be known as Six Hundred West Main.
“See you in 2018!” reads a handwritten sign on the door of the now-closed Blue Moon Diner. The beloved institution temporarily ceased operations last May when construction appeared imminent but is expected to reopen as part of the new complex.
Construction has begun on the Quirk Hotel, which is being built behind two structures across the street from Six Hundred West Main. At the western end of West Main, the Draftsman Hotel is nearing completion.
Romenesko said the new developments are of high value because of their proximity to UVa. He said the land has been “recycled” as it redevelops.
“Former underperforming sites get put to a higher use along West Main, and surrounding residential neighborhoods may be reclaimed for their originally intended residential use,” he said.
Several studies from over the decades have called for West Main Street to become more of a link between the Downtown Mall and UVa. That’s part of the justification for the city’s proposed $31 million streetscape, a plan that been under development for at least four and a half years.
Construction documents for the first phase will not be completed until next spring.