Category: Featured News

NASHVILLE, TENN. — Velocis, a private equity real estate investment management firm, has recently completed the $15 million renovation of Two Eleven Commerce, a 233,341-square-foot office building located at 211 Commerce St. in downtown Nashville. Velocis purchased the 11-story office tower in spring 2020 with Lincoln Property Co., the third joint venture between the two Dallas-based firms.

Built in 2000, the office building’s renovations include a two-story lobby with a new glass entry portal, contemporary conference center, integrated tenant lounge with indoor/outdoor seating, onsite catering kitchen and a fitness center with full locker rooms and showers. Other improvements throughout the office tower include upgraded and modernized elevators and elevator bays, exterior paint, new windows and a new gateless entry parking system in the building garage.

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Velocis, a Dallas-based private equity real estate manager, acquired the two-building Research Square at 1500 & 1550 Research Blvd. in the Shady Grove submarket of Rockville in a joint venture with Arlington, Virginia-based Altus Realty.

The acquisition includes 89,640 square feet of office space across two buildings on 7.45 acres, just west of Interstate 270. The Shady Grove submarket is the most sought-after biotech cluster within Maryland’s nationally recognized life science market. The traditional office space will be converted to life science and lab space, with construction scheduled to begin in January 2023.

This submarket consistently ranks as one of the top life sciences clusters in the U.S. The region is home to the headquarters of many distinguished national public health research and regulatory agencies including the National Institutes of Health (NIH), US Pharmacopeia, the Biomedical Advanced Research and Development Authority (BARDA) and the U.S. Food and Drug Administration (FDA), to name just a few.

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Velocis recently purchased two multifamily assets, Highline, a 208-unit multifamily community in San Antonio, and Station 40, a 246-unit multifamily community in Nashville. Highline and Station 40 are Velocis’ third and fourth multifamily assets. Velocis also owns multifamily assets in Charlotte and Austin.

“San Antonio and Nashville continue to be top job markets, and both are seeing excellent population and economic growth. We believe the San Antonio to Austin corridor will continue to see robust growth, as will Nashville,” said Jim Yoder, partner. “Multifamily is one of the most dynamic sectors in the real estate industry. Both assets provide value-add opportunities and are poised to achieve strong rent growth.”

Built in 2000, Highline is located 10 minutes east of the University of Texas at San Antonio and across the street from the new University Village mixed-use development. Once completed, University Village will span 114 acres, and include 320,000 square feet of office and 119,000 square feet of retail, all walkable from Highline.

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Partner Paul Smith offers a full picture of the company’s recent decision to enter new territory.

As online shopping transitioned from “an option” to “first choice” for many end clients in the past few years, demand for space has skyrocketed. An increasing number of companies continue to enter the booming industrial sector and developers are barely keeping pace.

According to CommercialEdge data, almost 500 million square feet of industrial space was under development across the country as of July, with the Dallas-Fort Worth market leading the way, with 32.6 million square feet under construction.

Last month, Velocis kicked off its entry into the industrial sector with the acquisition of two development sites in the Dallas area. The company teamed up with Sumitomo Corp. of Americas to develop 850,000 square feet of Class A industrial space in the South Dallas and the Great Southwest submarkets of Texas. Partner Paul Smith offered Commercial Property Executive an in-depth view on the strategy behind this move.

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For its first Nashville project, a Dallas-based real estate company bought an office building in the heart of downtown Nashville, with plans for significant renovations.

In a joint venture with Lincoln Property Co., Velocis bought the 232,194-square-foot complex at 211 Commerce Street. The purchase price wasn’t disclosed, but sources with knowledge of the deal said the figure was around $50 million.

Velocis is also putting $13 million into refurbishing the structure, which ranks among the largest downtown office buildings, according to Nashville Business Journal research. Construction is expected to start within 90 days and wrap up by year’s end, said Jim Yoder, a founding partner at Velocis.

“We think Nashville has become a haven for technology and financial services and maybe somebody who’s looking for a little more hip environment, and so we’re going to try to create that,” Yoder said.

This is Velocis’ first buy in Nashville. But the Texas-based firm has a significant stake in Austin, another popular tourist destination, and has been scouting Music City for a year or so trying to find the right project, Yoder said. He lists similarities between the two cities’ dynamics and energy, along with Nashville’s strong entertainment business, as attractions.

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The company acquired a 240-unit community in Austin, Texas from Stratus Properties.

Velocis has completed the acquisition of The Saint Mary, a 240-unit Class A community in Austin, Texas. Stratus Properties sold the asset, which had an occupancy rate of 85 percent at the time of the deal.

Wildhorn Capital assisted the buyer in sourcing the purchase and will oversee management operations. Berkadia marketed the community on behalf of the seller. In June 2018, the developer financed the project with a $26 million loan from Texas Capital Bank, according to Yardi Matrix data.

Located on 14 acres at 7500 W. Slaughter Lane, the garden-style property encompasses 18 three-story buildings completed in 2019. The unit mix has one- and two-bedroom floorplans with sizes between 884 and 1,432 square feet. The amenity package includes a gym, a swimming pool, business center and open-air kitchen.

The current transaction marks Velocis’ second multifamily acquisition. Towards 2020’s end, the company acquired its first residential asset: the 201-unit Beverley community in Charlotte, N.C. Proffitt Dixon Partners sold the property for $53 million, Yardi Matrix data shows. Velocis received a $35.2 million acquisition loan from Prime Finance Partners for that purchase.

In December, Wildhorn Capital acquired Bradford Pointe, a 264-unit community in Austin, Texas. The company secured a $24.4 million Freddie Mac loan originated by CBRE.

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More suburban apartments have sold in Charlotte, this time to an investor that recently entered the apartments acquisition space.

Dallas, Texas-based Velocis, a private equity real estate manager, has acquired the Beverley apartment property in the Ballantyne area, at 11926 N. Community House Road. Velocis paid $53 million for the 201-unit property, or a little more than $260,000 per unit.

This is the first apartment acquisition for Velocis, the company said. Much of its portfolio includes office buildings, although it also owns retail and mixed-use properties. In Charlotte, it also owns a data center in uptown.

As a few commercial asset classes have become more uncertain through the Covid-19 pandemic, some investors have begun buying, for the first time, apartment properties, as JLL and others have noted. Charlotte has seen a buying spree of apartments in the second half of 2020, especially in the suburbs. The sector has been widely viewed as more stable and resilient through the pandemic.

Beverley, which was developed by Charlotte-based Proffitt Dixon Partners, finished construction this year. The property was 71% leased at the time of sale. Beverley includes amenities like coworking spaces, a rooftop deck, saltwater pool, dog park, spa, fitness center and upscale interior finishes.

Jim Yoder, partner at Velocis, said in a statement the firm sees immense opportunity in the U.S. multifamily market but remains incredibly prudent in how it deploys capital.

“In fact, we looked at nearly 100 multifamily assets before finding the right fit with Beverley,” Yoder said. “As a new, high quality, top-of-market asset in the late lease-up stage, the fundamentals we found in Beverley will allow us to continue the property’s leasing momentum toward stabilization without renovation costs and the associated risk.”

JLL marketed the Beverley property.

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