Kane Realty expects to break ground on a new 214-unit apartment complex in North Hills in the next few weeks.
The $34 million project, called Midtown Green, will be built next to Harris Teeter and Park & Market, the 409-unit apartment complex that Kane Realty sold for a record sum in April.
It will include 5,550-square-feet of ground-floor retail space and is scheduled to open in 2014.
Federal Capital Partners announced this week that it is providing a $5.15 million mezzanine loan for the project, while Kane is contributing the land and some cash. The remainder is being financed through a traditional construction loan.
Kane and FCP are partners in the Allister North Hills Apartments, a $53 million joint venture that is being constructed just south of North Hills in the Ramblewood residential community.
The first apartments in that 434-unit complex are expected to be available for rent in April.
Developers across the Triangle have been racing to take advantage of the red hot Triangle apartment market, where occupancy levels and rents have been rising.
Allister North Hills and the 266-unit Bainbridge Six Forks project near Strickland Road are the only projects now under construction in the North Hills area, but about 775 new units have been proposed, according to Karnes Research and Triangle Apartment Association.
And in downtown Raleigh, just a few minutes drive from North Hills, there are 1,200 units now under construction.
Bryan Kane, FCP’s vice president of acquisitions, said North Hills offers apartment residents something they can’t find anywhere else.
“We think the North Hills and Midtown area is somewhat insulated from the supply in the remainder of the market given that our partner there controls all the supply, essentially,” he said. “Not to mention the amenity base present there is really not present in most other locations in the Triangle.”
Bryan Kane is the son of North Hills developer John Kane. The site where Midtown Green is to be built is near where Kane Realty and Concord Hospitality Enterprises are constructing a $40 million hotel that is scheduled to open in late May.
The ability of apartments in North Hills to command some of the highest rents in the Triangle was confirmed in April when Kane Realty sold Park & Market for $82 million.
The price shattered the Triangle record for the most paid for an apartment complex on a per-unit basis.
Midtown Green is the seventh local real estate project that Washington-based FCP has invested in over the past 18 months.
The firm has entered into two joint ventures with Charlotte-based Grubb Properties to acquire the Glen Lennox development in Chapel Hill and the Sterling Forest apartments in North Raleigh.
FCP acquired the first phase of the West Village development in downtown Durham in 2011, and took a controlling interest in the project’s second phase last year.
Bryan Kane said FCP hopes to move forward later this year on a 200-unit apartment complex on a surface lot in West Village.
Bryan Kane said that, along with Washington, the Triangle is likely to remain one of the firm’s top markets for investment opportunities. FCP is also looking to make investments in Charlotte and Charleston, S.C.
He said the firm tends to target areas where government, education and health care are all major drivers of the local economy.
“Those things seem to continue to propel growth and they seem to keep you somewhat insulated from other issues that might occur,” he said.