The sale and financing of a garden-style apartment complex in the shoreside city of Newport News, Virginia, underscore how one of the stronger multifamily markets in the country continues to attract investors despite higher borrowing costs and stricter lending standards.
Washington, D.C.-area firms Penzance and Kettler teamed up to buy the 396-unit Compass at City Center in December for $75.5 million, or $190,657 per unit. The deal stands as the largest multifamily sale in Newport News in 2025 and one of the year's largest in the Hampton Roads region. It also demonstrates the sustained investor confidence in one of the region's most supply‑constrained and fundamentally strong markets for rental apartments.
Equally impactful is the strength of the financing, which reflects lender confidence in both the property and the larger Newport News market. Berkadia secured acquisition financing that aligned with the new owners' long‑term business plan, supported by the property's performance, walkable location and the buyers' proven track record, the firm said.
That lenders responded favorably despite elevated interest rates also reflects the durability of demand for well‑located rental housing in markets with diverse employment bases and limited new multifamily supply.
As a result, this transaction not only reinforced Hampton Roads' position as a stable, high‑performing multifamily market but also signals strong, continued investor appetite for institutional properties tied to mixed‑use hubs and major economic drivers.
In recognition, the deal earned a CoStar Impact Award for sale/acquisition of the year in Hampton Roads, as judged by an independent panel of local industry professionals.
About the property: Completed in 1985, Compass at City Center is located blocks from the City Center at Oyster Point mixed-use district and near such major employers as Jefferson Lab, Huntington Ingalls Industries, Riverside Health System and Canon America. DF Ventures, the investment arm of Newport News-based Drucker and Falk, bought the complex in 2018 for nearly $47 million and invested $6 million during its ownership, adding a clubhouse, making interior renovations and additional enhancements. The investment "was a compelling opportunity to leverage DF Multifamily's property management platform," said Eric Skow, Drucker and Falk's director of acquisitions, in a release at the time of the sale to Penzance and Kettler.
For Penzance, the deal underscored a larger push by the Washington-based firm to expand its holdings in the Southeast. The company spent roughly $200 million to acquire four existing and planned multifamily properties in Virginia and North Carolina to close out the year, including a 268-unit, four-story multifamily and retail project in Virginia Beach.
What the judges said: The deal is a "highly impactful transaction" for Hampton Roads, said Lyndon Remias, city auditor for Virginia Beach, who held it up as an example of continued investor confidence in the market. "[Compass at City Center's] combination of high barriers to entry, limited new multifamily development, and a deep, stable renter base supported by major employers positions it for long-term rent growth and value creation."
They made it happen: Drew White, senior managing director; Carter Wood, managing director; and Cole Carns, director of investment sales, all with Berkadia, represented Drucker and Falk in the sale.