OneFive Capital, a Philadelphia-based real estate company, has purchased one of the country’s largest modular multifamily buildings “Next LVL,” a Class A, 281-unit building in the University City neighborhood of Philadelphia for $88 million. OneFive plans to rebrand the development as “SOLO on Chestnut“.
Rittenhouse Realty Advisors, RRA, represented the seller of 4233 Chestnut Street, Alterra Property Group and brought the buyer to the deal. The Rittenhouse brokers on the deal included: Ken Wellar, Douglas Sitt, Mark Duszak and Corey Lonberger.
To finance the transaction, OneFive secured a loan with ACORE Capital.
RRA sold the property as a development site to Alterra, a Philadelphia-based real estate investment firm that purchased the site in Dec. 2019 and started construction in Jan. 2020. The luxury apartment building opened for occupancy in June of 2021. It is presently 80 percent occupied.
The 250,000 sq. ft. seven-story building, which comprises market rate apartments, also features 7,391 sq. ft. of commercial space and amenities that include a rooftop veranda, 54 underground parking spots, a dog park and a variety of modern tenant amenity spaces.
The building is within walking and biking distance to the University of Pennsylvania, Drexel University, Hospital of the University of Pennsylvania, Penn Presbyterian Medical Center, and CHOP.
University City has experienced a development boom over the last ten years due to an influx of life science and biotechnology companies setting up shop close to The Pennovation Center, a business incubator and laboratory developed by the University of Pennsylvania.
“We are excited to announce the sale of one of the largest modular multi-family projects in the US,” said Wellar. “Modular construction is the future of multi-family development.”
Wellar added, “We are seeing more modular development across the country as it allows for quicker development timelines. Investors are becoming more comfortable with the product and we are not seeing much difference in cap rates vs. traditionally built properties. This is the eighth modular multi-family project our firm has sold.”
Rittenhouse Realty Advisors has been one of the most active multifamily market rate and student housing investment sales firms in the U.S, with “a few hundred million dollars’ worth of deals under agreement across different markets with different buyers, ” said Sitt who added, Rittenhouse is seeing more family office groups enter the space and this deal was a prime example of that. “We have the ability to bring national buyers as well as the family office groups to compete on deals and drive up pricing.”