A Maryland real estate firm continues to expand its footprint across the Charleston region with the recent purchase of a nearly $92 million, mixed-use development on Daniel Island.
Continental Realty Corp. paid $91.75 million earlier this month for the 313-unit Central Island Square Apartments and its retail operations on an 8-acre site bound by Island Park Drive and Central Island and Fairchild streets.
It's believed to be one of the largest commercial property transactions in Berkeley County, according to Real Property Services director Wilson Baggett.
The sprawling multifamily complex includes one- to three-bedroom apartments and townhomes and 28,716 square feet of commercial space, including O2 Fitness, New York Butcher Shoppe, Michael's Barkery and healthy food and drink restaurant Beech.
The purchase was in the works months before the coronavirus pandemic, which could lead to lost revenue for commercial real estate landlords as retailers, restaurants and other tenants are forced to temporarily close their doors.
The buyer borrowed $126.75 million to help pay for the Daniel Island property. It's unclear what the extra $35 million will be used for.
The previous owner was an affiliate of Charlotte-based real estate investment firm Faison, who completed construction on the 320,500-square-foot development in 2018.
Continental's purchase comes two months after the Baltimore investment firm paid $147 million for Mount Pleasant Towne Centre, one of the region's premier shopping centers that is anchored by Belk department storeand is largely closed because of the pandemic.
"We have been interested in the Charleston region for many years," said J.M. Schapiro, CEO of Continental Realty. "In fact, in 2016 we purchased West Ashley Shoppes. After that purchase we continued to look for the right opportunities, and we were excited that these two deals, Mount Pleasant Towne Centre and Central Island Square came together at the same time."
The firm selected the mixed-use development on Daniel Island because of its central location and proximity to commercial office space, retail such as Publix supermarket and other shops, boutiques and restaurants.
"Daniel Island has an extremely high barrier-to-entry due to the limited amount of multifamily permits in the planned community, which protects our investment," Schapiro said. "This acquisition, achieved on an off-market basis, demonstrates our ability to leverage the relationships we have built in this market based on CRC’s ownership and management of multiple assets."
The company said the latest purchase "in a highly desirable section of the country" is part of its core cornerstone portfolio that should provide stable income over the long term.
"We continue to look for other opportunities in the area and hope to grow our portfolio in this region," Schapiro said.
In addition to West Ashley Shoppes on Orleans Road across from Citadel Mall, the buyer owns two other income-producing properties in South Carolina. They include two apartment communities in Greenville and Bluffton.
In all, Continental owns and manages more than 5 million square feet of commercial space as well as almost 10,000 apartment units across the mid-Atlantic and Southeast.