PORT ROYAL, S.C. — NorthMarq Capital has arranged and closed a $9.1 million equity investment on behalf of Prominent Realty Group (PRG) for the purchase of a $38 million apartment property, the 400-unit Preserve at Port Royal located in Port Royal, S.C.
The $9.1 million equity infusion came from an institutional investor that specializes in value-add properties.
“The main challenge about this transaction was its location being perceived as tertiary,” says Will James, vice president of NorthMarq Capital’s Atlanta office who represented PRG. “The property was built in 2006 and in a great location within the city of Port Royal. Just 20 minutes away and closer to Hilton Head, a similar vintage project traded for a 20 percent premium just because it was on the way to Hilton Head Island.”
PRG’s basis in the property is at or just below replacement cost, adds James. “Once the state sells the 50-acre Port of Port Royal, the waterfront will become a vibrant retail and tourist destination, further improving the rental market on the Port Royal island.”
Economic generators locally include the University of South Carolina Beaufort campus, Parris Island’s Marine Corps, and the Beaufort Air Naval station, which is completing a $300 million runway and hangar facility for the new Lockheed Martin F-35 fighter jet.
The city’s eventual transition to a waterfront tourist destination, coupled with the main three economic generators, means the Preserve at Port Royal apartments will realize tremendous rent growth over the next five to 10 years, predicts James.