RALEIGH — The historic Crabtree Jones House is slated to be moved in the coming days as construction begins on an apartment complex that will occupy 15 acres just inside the Beltline on the west side of Wake Forest Road.
Davis Property Group and AVR Realty paid nearly $4.56 million this week for the land, which was owned by the family trust of Charles William Gaddy, a real estate investor and former Raleigh city councilman.
Russ Davis, Davis Property Groups owner, said site work would begin immediately on the 243-unit project, to be called the Jones Grant Apartments. Davis is donating the Crabtree Jones House, a local and National Historic Landmark that was built in the 1790s by Nathaniel Crabtree Jones, to Preservation North Carolina and paying to have it moved to an adjacent site.
Davis has been working on the project for more than five years, and his Greenville, S.C.-based company has had the property under contract for more than a year. The first units in Jones Grant are expected to be completed by the fourth quarter of next year.
This is the first joint project that Davis and AVR, an equity partner in the deal, have done. The Yonkers, N.Y.-based companys portfolio includes office, industrial, retail and residential properties. Davis and AVR both use the same property management company, Greystar, which is how they connected.
Theyve typically been a buyer of existing projects for their own account, Davis said of AVR. Theyre a long investor, which we really wanted for this site.
New units hit the market
Having patient, long-term investors is likely to be increasingly important for apartment developers over the next few years. While the Triangle has been among the better-performing markets in the country, it is expected to cool over the next 18 months as a deluge of new units come on the market.
A total of 9,336 apartment units were under construction in the Triangle in September, the highest level reported during any period since 1997, according to Karnes Research and the Triangle Apartment Association. That includes several projects that are being built within a mile and a half of the Jones Grant site.
Davis said the financing for the Jones Grant deal also provides long-term stability, as his group was able to secure a 15-year permanent construction loan with a fixed interest rate from its lender ING. A typical construction loan lasts three years and then is shifted to a long-term, permanent loan once construction is complete.
You typically wouldnt be able to have that long-term rate locked in until three years from now, Davis said.
Davis expects that Jones Grant will offer more affordable rents than projects at North Hills and elsewhere that are more costly to build because they include parking decks. Davis is also counting on the projects close proximity to Holly Park Shopping Center, which is anchored by a Trader Joes, to be a major draw.
What we believe is, what matters to the customer, what they pay money for, is walkability, he said. And from this site its an amazing ability to walk to the retail amenities you can use every day.
The surrounding property owners have opposed a city recommendation that Hines Drive connect with Wake Towne Drive as part of the project. Davis group is providing the money to complete the road, but he said its up to the city to determine when the road should be extended.
Bracken: 919-829-4548; Twitter: @brackendavid