Two of troubled real estate developer Green Street’s earliest successes now have new ownership. AHM Group finalized a deal to purchase the Chroma and Hue properties in the Grove for a little more than $88 million last week.
“They represented a great buying opportunity for several reasons, and the price was one of them,” says Kyle Howerton, co-founder and principal of AHM Group.
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The two buildings boast a combined 346 luxury apartments and 20,000 square feet of retail space at the prominent intersection of South Vandeventer Avenue and Manchester Avenue in the city’s Grove neighborhood. Howerton notes that they’re nestled near Barnes-Jewish Hospital, the Goldfarb School of Nursing, WashU’s medical school, Cortex, Saint Louis University’s South Campus, and other assets.
“They’re trophy, class-A assets in a trophy, class-A part of the city,” Howerton says. “You’re essentially surrounded by education, employment, and now with the City Foundry, entertainment too.”
These buildings are ones Howerton says he’s quite familiar with, having been involved in Hue (900 S. Sarah St.) since its construction and helping to arrange the financing on Chroma (4041 Chouteau Ave.) in 2019. That intimate understanding gave him insight into how the original developer of the properties, Green Street, didn’t cut corners on quality, he says.
“The things you can’t see: Sound attenuation, in terms of insulating walls that separate units, and investing in the overall quality of construction materials, whether it’s doors, windows, [or] air conditioning units on the roof,” Howerton says. “Green Street planned to own them indefinitely. These were really their babies.”
The new acquisitions do need some work, Howerton says, mostly aesthetics and some deferred maintenance, like knicks on the walls in first floor common areas that are obvious when someone walks in. It’s the little things that haven’t necessarily been taken care of in a couple years that can compound issues.
Howerton and his AHM Group can now add two buildings with high occupancy rates to their portfolio; more than 80 percent of Chroma is full and Hue has an occupancy rate above 90 percent, he says, adding “people want to stay and renew.” Both of those occupancy figures increased while AHM worked to close the deal.
For Howerton, keeping local ownership of these prominent apartment buildings was an important part of why he and his development group wanted to buy them.
“We wanted to protect these properties in the Grove neighborhood from out-of-town investors that look at the assets differently than we do potentially,” he says.
The development group brought in an outside institutional equity investor to help close the Chroma and Hue deal, Howerton adds, though he declines to name the investor at this time.
“They had maybe been to St. Louis one time, in their childhood and had their own perception of St. Louis and weren’t necessarily excited for the city,” he says. “But as they came to town, saw the properties, saw the market, saw the city, they became more and more excited.”
Enough to make their first large investment into the St. Louis real estate market, Howerton says.
AHM has been on a development and deal blitz as of late, buying up multiple buildings to create a new district called City Commons in Downtown West, and this acquisition in the Grove helps deepen their position in that neighborhood too. They previously bought Urban Chestnut Brewing Company’s sizable brewery on Manchester, Howerton says. He says the company will likely not be making many more major investments as it turns to focus on managing the properties it has acquired or has in the works.
