Capano buys Trolley Square apartment tower
Capano Management continues to bolster its residential portfolio with the acquisition of 1303 Delaware Apartment Homes in Wilmington's fashionable Trolley Square neighborhood.
A sales price was not disclosed. Capano financed the purchase with a fixed-rate loan from Fannie Mae.
The privately-held Wilmington-based developer's multifamily division, Capano Residential, purchased the 231-unit high rise from Merion Realty Partners, a Wynnewood, Pennsylvania, real estate investment firm.
Jeffrey Shumaker, vice president responsible for Merion's multifamily division, declined to comment on the transaction.
"That's not public information," Shumaker said of the sale.
Upon acquisition, Capano Residential, which is headed by Louis J. Capano, renamed the property Parq at the Square.
Capano Residential has made big investments in the residential market recently. Last year, the company purchased an adjacent, 100-unit Trolley Square apartment building at 1320 Delaware Avenue. The property has since been rebranded The Square at Trolley.
Capano is also not just a buyer, but also expanding its apartment portfolio through development. The company will deliver another 500 new luxury apartments and rental townhomes in Delaware over the next year. It's also actively seeking approvals to build over 1,000 residential units in all three Delaware counties. Capano expects to break ground on these properties between 2019 and 2020.
"It's our preferred space right now," Louis J. Capano III said of the multifamily market. "Retail rental rates are stagnant and office vacancies are pretty high in Delaware. We've seen the demand for multifamily increase and it just seems to be where the market is taking us."
The company has proposed building 408 units in three buildings and 155 new homes on the site of the Brandywine Country Club in Brandywine Hundred. That plan has faced opposition from local residents.
Capano's newest acquisition, 1303 Delaware, consists of studio, one, two- and three-bedroom units offering panoramic views of historic Trolley Square. The average unit size is about 928 square feet and rents range from $950 per month to $2,260 per month.
"The Trolley Square rental market is good and will remain good," Capano told The News Journal. "I think you are able to attract young professionals who will be good residents and want to be in the city."
Trolley Square has attracted young professionals and millennials because of its location near Wilmington's bars and nightclubs. It also provides accessibility to major roadways including I-95, and Route 202. Situated less than two miles from Wilmington's train station, Trolley Square offers options for residents who commute to New York or Philadelphia.
The building's amenities include fitness and business centers and a parking garage. Capano said his company will renovate the building's 6,000-square-foot first floor to add a game room, wi-fi, kitchen, and study. Plans are also in the works to add a rooftop deck on the property.
"When the weather is good, there is nothing like being on the 15th floor and overlooking the city," he said.
Prior to the sale, Merion spent $2 million upgrading 84 of the building's 231 units. It is not clear why Merion didn't upgrade the remaining 147 units.
Commercial real estate broker Holiday Fenoglio Fowler marketed the 1303 Delaware on behalf of Merion. Senior marketing director Mark Thomson and directors Carl Fieberg and Francis Coyne had the listing.
The building attracted about 15 bids, largely from Philadelphia-area investors, Capano said.
"“Many of the groups attracted to this offering were looking to acquire in Delaware for the first time and were drawn to the strength of the submarket, property and proven value-add story," Fiberg said.
Contact Jeff Mordock at (302) 324-2786, on Twitter @JeffMordockTNJ or jmordock@delawareonline.com.