Glen Lennox gets new $42 million investor

Residents of a Chapel Hill apartment complex might see renovations after a Washington, D.C.-based company announced a $42 million investment Tuesday.

Federal Capital Partners is pairing with Grubb Properties, owner of the Glen Lennox apartment community off N.C. 54 since 1986. The project also includes Riverwoods Apartments in Raleigh.

The money in Glen Lennox will mostly go toward maintenance and renovations for the property, said Todd Williams, the vice president of investments for Grubb. He said the property is more than 60 years old.

“We do know that at some point in time in the long-term future that we will have to make some tough decisions about what the future of that property will be given the age of some of those assets,” Williams said. “That’s essentially the process that we’re going through with the community right now.”

Grubb decided to seek a partner last spring, Williams said.

“Federal Capital Partners stood out amongst all the folks that we had talked to,” Williams said. “They had a similar interest in the property that we did, which was more of a long-term interest in seeing that property through any changes.”

The investment marks Federal Capital’s first in North Carolina.

“We’ve been looking in the Raleigh-Durham area specifically for a couple of years now,” said Alex Marshall, managing partner for Federal Capital.

“The Glen Lennox complex is very well-located in Chapel Hill, which is a strong market for apartment demand and other fundamentals,” he said.

Stephen Estes, a UNC senior who has lived in Glen Lennox for two years, said companies buying from a distance may change the target community for the neighborhood.

“Glen Lennox in the past has been a place for affordable housing and access to campus, and it has met the needs of people who need those two things,” Estes said.

“They’ll be trying to maximize revenue. I think it’s probably going to go to more expensive housing, which would eliminate one good option for affordable housing close to campus,” he said.

But while Williams said Federal Capital will be involved in decision-making for the properties, he said residents won’t see a major change as a result of the investment.

“This is really a capital investment and not a real change in the management,” Williams said. “We’ve managed the property as long as we’ve owned it, and we’re going to continue to do so.”

Marshall said the companies will try to arrive at decisions that work for everyone.

“We’re certainly interested to see how it shapes out, but we trust that Grubb is now on the right track,” Marshall said.

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