GRAND RAPIDS — A metro Detroit investor has acquired a 320-unit luxury apartment community in West Michigan less than a year after it was finished.
Gideon Pfeffer, CEO and managing partner of The GSH Group in Clawson, on Tuesday acquired The Grove Luxury Apartments at 3590 E. Beltline Ave. NE in Grand Rapids Township from the Terra Haute, Indiana-based developer Thompson Thrift Residential.
The sale price was not disclosed.
Pfeffer said his firm saw The Grove as a “great addition” to its portfolio of about 7,000 apartment units in metro Detroit, Lansing, Indiana, Ohio, Maryland and Florida. GSH also owns one other suburban Grand Rapids property, Foote Hills in Kentwood.
“We love the growth Grand Rapids has seen and continues to see,” Pfeffer said. “It ranks really high nationally for millennials to live and work, it’s affordable for companies to (locate) there, (and) population and job growth has been strong.”
Pfeffer said his company plans to keep The Grove’s name and branding in place and will not make any changes to the property at this time.
Thompson Thrift opened leasing and began moving residents into the 320-unit, 20-building community in summer 2021. Construction on the development was fully completed in August 2022.
The 24-acre complex offers two-story farmhouse-style apartment homes with a mix of one-, two- and three-bedroom units that average 1,200 square feet.
The apartments feature “designer” interiors, per developers, and the complex offers shared amenities like a gym, heated pool, grilling areas, pickleball courts, a dog park and a pet spa.
The development is about 94 percent leased, with just 20 units available. As of November, rents ranged from $1,455 for a one-bedroom apartment to almost $2,500 for a three-bedroom unit.
“While they’re luxury, they’re still, I think, affordably priced,” Pfeffer said, noting that about 65 percent of the units have their own garages and offer more of a single-family home experience than that of an apartment.
The development is well-positioned in Grand Rapids Township, one of the metro area’s more affluent suburbs. As of 2021, annual median household income in the township was about $112,849, compared to $55,385 for the city of Grand Rapids, according to the U.S. Census Bureau. It abuts Ada Township — home of Amway — which had a median household income of about $141,992 in 2021.
Josh Purvis, managing partner for Thompson Thrift, said The Grove was the company’s first residential development in Michigan.
“(It was) something we were excited to be able to do … (to) work with the city to run a competitive process and get different investors interested in buying the property at the end of the day,” he said. “We’re excited — we think we’ve developed a Class A-plus community up there in Grand Rapids, one that was received well by the market, and we're just excited to add it to our track record.”
Since building The Grove, Thompson Thrift has developed two other multifamily communities in Michigan — The Crossings in New Hudson and The BLVD at Wilson Crossings, a luxury townhome development underway in the Grand Rapids suburb of Wyoming. The former is open for leasing, and the latter is expected to wrap construction in early 2024.
Purvis said it’s typical for his firm to sell a multifamily development like The Grove within a short timeframe.
“Whenever we do a new development, we set expectations with our investors for how much money they will invest with us and then how long that investment will take place, and then we’ll estimate what their returns are. So it was from the beginning scheduled to be right around a three-year investment cycle from the time we started construction to when we sold the property.”
He said he expects the firm will sell the other Michigan developments within a similar timeframe.
Purvis said Thompson Thrift does not currently have any other land purchases underway in Grand Rapids, but the firm is keeping a close eye on what’s become one of the fastest-growing real estate markets in the country.
“We really like that market a lot,” he said. “It would be suited for more opportunities up there (and we) would probably like to look at another one.”
From Crain’s Detroit Business.