Middleburg Completes Initial Close on $75 Million Workforce Housing Fund
Middleburg, a Virginia-based investment, development and management firm, completed its initial closing on Workforce Housing Fund and will contribute a previously acquired property, Vesta Derby Oaks in Louisville, KY, to the fund as its first asset. Middleburg will continue to raise capital and add other family office and high net worth investors to the fund, which is expandable to $75 million, giving Middleburg the capacity to invest in approximately $250 million of assets.
The fund’s strategy is to acquire and substantially rehabilitate physically and/or operationally distressed assets (major deferred maintenance, poor management, high vacancy etc.) of existing multifamily workforce housing in the Southeastern and Mid-Atlantic regions of the United States. After renovations, the fund will own modern, updated communities at a basis significantly below replacement cost, allowing Middleburg to rent high quality apartment homes at levels affordable to working families.
The fund’s first acquisition is Vesta Derby Oaks, a $30 million apartment redevelopment in Louisville, KY. The property consisted of 428 identical two-bedroom units and was 15 percent occupied at the time of purchase. Many of its buildings were abandoned, creating significant blight and crime risk for the neighborhood. In addition to introducing professional management and boosting security, Middleburg is performing a complete renovation including all new systems, roofs, exteriors and interiors and creating a mix of one, two and three-bedroom units (418 in total).
“The lack of supply of quality rental housing affordable to working families and individuals has reached crisis levels. Our investments through the Fund not only provide high quality rental housing, but achieve strong returns for our partners, who appreciate the social impact of community building,” said Middleburg Managing Partner, Chris Finlay. “Vesta Derby Oaks is a great template for how we can create real transformational impact in the community, with far reaching benefits.”
Middleburg has partnered with KeyBank for construction financing of Vesta Derby Oaks. “Teaming with KeyBank provided a very efficient and competitive capital structure for this project,” stated Kory Geans, Partner and Chief Investment Officer for Middleburg. “KeyBank’s strategy aligns well with ours and we anticipate partnering with them on other deals within this fund.”
Middleburg, through the Workforce Housing Fund, is partnering with a select group of sophisticated investors who are aligned with its mission to build thriving communities that create real and unique value for residents, neighborhoods, local governments, and partners. “Middleburg’s Workforce Housing Fund and its investment partners are committed to own and operate these properties long term, and provide exceptional management and service to its residents.” said Alonso Garza, Partner and Head of Funds Management.
About KeyCorp: KeyCorp's roots trace back 190 years to Albany, New York. Headquartered in Cleveland, Ohio, Key is one of the nation's largest bank-based financial services companies, with assets of approximately $138.8 billion at September 30, 2018. Key provides deposit, lending, cash management, and investment services to individuals and businesses in 15 states under the name KeyBank National Association through a network of over 1,100 branches and more than 1,500 ATMs. Key also provides a broad range of sophisticated corporate and investment banking products, such as merger and acquisition advice, public and private debt and equity, syndications and derivatives to middle market companies in selected industries throughout the United States under the KeyBanc Capital Markets trade name. For more information, visit https://www.key.com/. KeyBank is Member FDIC.
About Middleburg: Middleburg is a fully integrated multifamily development, investment, and management company operating in the southeastern and mid-Atlantic United States. Since 2004, Middleburg has acquired and developed more than 16,000 apartment units, executing approximately $2.0 billion in transactions. The Middleburg team shares a vision for greater value creation through community impact. The firm’s success is rooted in a genuine desire to serve its local communities in thoughtful and holistic ways. Middleburg embraces people, property, and partnerships to enhance the lives of others, contribute positively to its neighborhoods and maximize real returns for partners. For more information, please visit www.LiveMiddleburg.com.