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The 716-unit Crystal Lakes Apartments in Chesterfield sold for $106 million

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A Richmond-based real estate investment, property management and construction firm has paid the second-largest amount for an apartment complex in the region in 2021.

Levco Management bought the 716-unit Crystal Lakes Apartments in Chesterfield County for $106 million in December.

Two months earlier, Capital Square 1031, a Henrico County-based real estate investment and management company, acquired the 339-unit The Flats at West Broad Village apartment community near Short Pump for $111 million.

Both sales also were among the largest amounts ever paid for an apartment complex in the Richmond area.

"We think it was probably the second largest acquisition of dollar amount acquisition price, the largest in terms of the overall investment [which includes $16.5 million in planned renovations] and the largest ever in Chesterfield County from a purchase price perspective," said Jared Levin, who along with Max Comess, founded the Levco in 2013 and both serve as managing partners.

Levco plans to spend $16.5 million in renovations, bringing the total investment to $122.5 million.

Crystal Lakes was built between the late 1960s and early 1970s. The 94 residential buildings - mostly town home-style apartments - are on 80 acres around two lakes off Meadowdale Boulevard near Hopkins Road and Chippenham Parkway.

The renovation project calls for making interior and exterior improvements, including updating the 386 units that were not renovated by the seller.

"We will go in and renovate to a much higher standard than what the seller did and really match and mirror the finishes and fixtures of newer properties," Levin said, noting that plans call for adding granite countertops, nicer cabinets, stainless steel appliances and new plumbing fixtures.

In addition to the interior renovations, the project also will include upgrading the swimming pool, adding playgrounds, adding dog park and landscaping.

Levco wants to take Crystal Lakes to the next level, the partners say.

New York-based Emet Capital Management, which bought the property from the lender in 2017 for $37.5 million, stabilized Crystal Lakes by spending about $25 million to update about half of the units that were not in rentable condition at the time, Levin said.

"That's how much it cost just to get the units in rent-ready condition. There were a lot of boarded up buildings that they had to go in and gut and renovate. So they spent a considerable amount of money just making it rent ready," Levin said.

"In a lot of ways when the prior owner bought the property it was it was a dead property," Comess said. "They brought it back to life and gave it a heartbeat. And now we're going to take it to the next level and really make it a property that the residents are proud of and upgrade it so it will be on par with some of the nicer town home communities across Richmond."

The apartment complex is 98% occupied and 100% leased.  Rents range from $750 to $1,350 depending on floor plans.

The 386 units that the prior owner didn't renovate will be targeted first as tenants move out, he said.

The two partners founded Levco when they bought a building on Brook Road in the heart of Jackson Ward for $430,000 in 2013. The building has two apartments on the second floor and retail space on the first floor.

The company now owns 13 apartment communities throughout Virginia - seven in the Richmond region and six in Hampton Roads.

In October, for instance, Levco acquired The Gallery Midtown apartment complex off North Nansemond Street in Richmond's Museum District neighborhood. It paid $28.25 million for the 157-unit complex.

Levin said he and Comess want their projects to be near to the headquarters because the closer they are gives them a better grasp of the apartment community. The company has a division that oversees property management responsibilities and another in-house construction arm to handle the renovations.

"We like being within a two- to three-hour drive from our corporate office because we found that we can execute and have the ability to stick to a business plan and perform on time and on budget and with more certainty," Levin said.

The partners have gone from buying their first building in Richmond to this latest purchase of the 716-unit Crystal Lakes Apartments.

"It's been quite a ride and we're very excited to build on this and see where the future takes us," Comess said. "We're actively in the market, we're always looking and we anticipate acquiring at least three or four properties in the next year."

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