Bonaventure Realty Group
Update
05/23/24
Bonaventure Multifamily Income Trust (BMIT®) Completes 1031 Exchange and Acquires Property in Charlottesville, Va.
Bonaventure, an integrated alternative asset manager focused on the investment, development, construction and management of innovative lifestyle multifamily communities in the Mid-Atlantic and Southeastern regions, has announced the sale of a roughly $18 million interest in Attain Downtown, a 156-unit Class-A multifamily community in downtown Norfolk, Va. and the acquisition of Cavalier Crossing, a 144-unit apartment community in Charlottesville, Va. The transactions were completed on behalf of Bonaventure Multifamily Income Trust, Inc. (BMIT®) – its perpetual life multifamily investment fund.
As part of the transaction, BMIT® will retain a majority stake in Attain Downtown and continue to oversee its operations. The company used the proceeds from the sale to acquire Cavalier Crossing, a 144-unit garden-style apartment community in Charlottesville, Va., through a tax efficient 1031 exchange. The combined transaction is representative of one of Bonaventure’s current investment tactics of extracting capital from stable core assets and redeploying it into undervalued or mismanaged value add opportunities with the potential for higher returns on a risk-adjusted basis.
Specifically, Bonaventure sold fractional ownership of Attain Downtown as a custom solution for an investor seeking to utilize the 1031 exchange. The sale was structured as a Tenancy-in-Common (TIC) transaction, which allows multiple investors to own undivided interests in a single property and defer capital gains taxes through a 1031 exchange.
“This transaction represents one of the many customized solutions we can offer our clients to solve their 1031 exchange needs, while also helping us grow strategic new partnerships,” said Bonaventure CEO and Founder Dwight Dunton. “The 1031 transaction type allows for all involved parties to benefit. BMIT® retained an ownership stake in Attain Downtown and continues to manage the property, and the new co-owner enjoys the potential for risk-adjusted returns without having to actively manage the property.”
Bonaventure’s private transaction partner added: “The Bonaventure team was most helpful and professional in getting our 1031 with multiple Tenants in Common over the finish line as new co-owners in a great apartment community. This was a complex and tedious transaction and we could not have completed it without their help and experience. We are looking forward to much prosperity and profit in our growing business relationship.”
Attain Downtown, ideally located in the heart of Downtown Norfolk, offers studio, one-, two-, and three-bedroom units with luxury finishes, walk-in closets, stainless steel appliances and energy-efficient designs. Amenities include a saltwater pool, 24-hour fitness center, gas grills, fire pits, and EV charging stations. Its prime location provides residents with easy access to dining and convenience options along Granby Street and proximity to the Historic Freemason District.
Bonaventure used the proceeds from the fractional sale of Attain Downtown to acquire Cavalier Crossing. Constructed in 2003 and strategically located near the University of Virginia and a Wegmans-anchored retail center, Cavalier Crossing will undergo a comprehensive renovation to upgrade unit interiors, amenities, and curb appeal. Bonaventure will enhance the existing amenity package which already includes a swimming pool, fitness center, basketball court, and volleyball court, to deliver an upscale community in a market where demand significantly outpaces supply.
Dunton continued, “The acquisition of Cavalier Crossing aligns perfectly with our current acquisition strategy of identifying undervalued assets in growth markets that offer significant potential for value creation. By leveraging our nearly 25 years of success in multifamily development, we plan to reposition this well-located property into a thriving multifamily community.”
The Charlottesville rental housing market is marked by high occupancy rates and limited new supply in the development pipeline. Charlottesville's vibrant economy, driven by its status as a hub for education, healthcare, and technology, makes it an ideal location for multifamily investment. The University of Virginia not only contributes to a stable demand for housing but also anchors the community with its medical center, the largest employer in the area. This dual influence of UVA’s educational and healthcare institutions further drives the demand for quality housing.
Cavalier Crossing is the latest addition to BMIT®’s 20-property portfolio, which consists of high-quality multifamily properties in strong markets across the Mid-Atlantic and Southeast regions. Since its inception in 2021, BMIT® has acquired properties, many of which have used custom-built 1031 or 721 exchange programs under the Internal Revenue Code. Many of these solutions cater to investors seeking stable cash flow from multifamily properties without direct ownership and active management.
