The Hilltop House Apartments complex in downtown Winston-Salem has been sold for $17.75 million by L.M. "Bud" Baker, the former top executive of Wachovia Corp.
The Bedrin Organization, based in Glen Rock, N.J., bought the 169-unit complex at 241 S. Cherry St. and 126 Brookstown Ave. in a deal that closed Monday.
Bedrin paid $10.83 million for the 2.56-acre South Cherry site and $6.92 million for the 0.74-acre Brookstown site, according to Forsyth County Register of Deeds filings.
Meridian Realty Group of Winston-Salem will serve as the property manager.
The Hilltop purchase is the most expensive of at least 23 existing apartment complexes that have been sold in Forsyth over the past 12 months for a combined $169 million.
The previous biggest apartment-complex sale occurred May 24 when Chapel Hill residential-investment company Eller Capital Partners spent $16.42 million to buy the 288-unit Ashton Oaks in Winston-Salem.
The Hilltop complex is in three separate buildings. The first was built in 1962 as a Holiday Inn motel, converted into a Best Western and shifted in 2011 and 2012 into 54 units. The North tower was built in 2012 with 50 units.
The South tower was built in 2014 by HTBT Properties LLC, Baker's development group, at a cost of $5 million using pre-fabricated pod components. It has 65 units that average about 630 square feet. It was the first commercial building in Winston-Salem to use this type of construction.
“We are excited about where downtown Winston-Salem is going, with the arts and the culture that is there with the Innovation Quarter,” Bedrin said in a news release.
Bedrin said its focus is to provide "a reasonably priced option for housing downtown."
"There is nothing in downtown Winston-Salem that has been renovated to modern standards that is under $1,000 in rentals. New construction is running between $1,000 and $1,500.
"We are, on average, below $1,000 and that’s where we want to stay. It’s a good spot to be at.”
Bedrin is committing $127,000 as part of the Fannie Mae Green Rewards program to reduce electric and water usage on the property.
Those improvements include new faucets and shower heads, LED lighting and new washers and dryers. Bedrin also has committed to creating a new dog park, painting outdated areas and creating a monthly event calendar.
“Teachers, nurses, medical tech workers, there is workforce housing that is needed in downtown and we want to provide something that is reasonably priced and fair," Bedrin said.
Bedrin owns 10 shopping centers in the Triad, including purchasing five in the past 13 months.
“We’re known for good shopping center development in the Triad because we bought our first property there in April 2007 and we’ve held onto it,” Bedrin said. “We want to become known for providing good reasonably priced housing in the Triad as well.
Apartment complexes have become a hot commodity in Forsyth.
Driving the selling and building trends, according to economists, are millennials — those born between 1981 and 1996 who are now between the ages of 23 and 38.
“The sudden interest in speculative apartment development is really a risk-capital response to millennial demographic and psychographic trends in the last decade,” said Tony Plath, retired finance professor at UNC Charlotte.
“The current generation of young adults is simply postponing milestone events, like marriage, buying a house and having kids until well into their 30s.”
The Urban Institute said in a 2018 millennial housing report that the marriage rate among young adults has fallen from 52.3% in 1990 to 38.5% in 2015.
Mark Vitner, a senior economist for Wells Fargo Securities, said investors “are trying to find what few pockets of value there are left in the apartment market.”
“Prices have been bid up so much in larger markets, such as Charlotte, Raleigh and Nashville, that investors are increasingly looking to markets that have been overlooked and show great potential for growth.
“Winston-Salem and Greensboro are at the top of the list of overlooked markets.”