Penzance's $200M Bet on a Shifting Mid-Atlantic Housing Market

WASHINGTON, DC – February 02, 2026 – Penzance, a Washington-based real estate fund manager, has significantly deepened its investment in the Mid-Atlantic's housing market, deploying approximately $200 million to acquire four residential properties across Virginia and North Carolina in the final quarter of 2025. The move adds 1,100 units to its portfolio and signals a bullish outlook on the region's growth, even as local markets present a complex and rapidly evolving landscape.

The acquisitions represent a multi-faceted strategy, combining purchases of existing apartment communities with a new build-to-rent development. This diversified approach aims to capture value across different asset types and risk profiles, from the bustling suburbs of Charlotte to the scenic mountains of Asheville.

A Calculated Blend of Value and Vision

The four-property portfolio showcases a deliberate mix of investment tactics. In Charlotte, North Carolina, and Newport News, Virginia, Penzance acquired stabilized, older communities with established value. The 318-unit Presley Oaks in Charlotte, built in 1996, and the 396-unit Compass at City Center in Newport News, built in 1985, were both purchased below their estimated replacement cost. This "value-add" strategy allows the firm to invest in operational upgrades and strategic renovations to increase appeal and rental income in well-located areas with strong employment bases.

In contrast, the acquisition of Nexus Luxury Apartments and Retail in Virginia Beach represents a move into a more modern asset class. Built in 2018, the 268-unit community with integrated retail space offers a turnkey investment in a high-demand corridor.

Perhaps the most forward-looking component of the portfolio is Arden Ridge, a planned 109-unit build-to-rent townhome development near Asheville, North Carolina. This project taps into one of the fastest-growing segments of the housing market. The build-to-rent sector has seen explosive growth nationally, with starts increasing over 100% since 2019, driven by demand from millennials and families seeking more space than a traditional apartment without the commitment of a mortgage. Penzance's project, featuring three and four-bedroom townhomes, is designed to meet this specific need in a market with limited family-oriented rental options.

“These acquisitions highlight the attractive opportunities we are seeing in residential projects with solid fundamentals and represent meaningful growth opportunities in target markets, across Virginia and the Carolinas,” said Jacob Rosenberg, Senior Vice President of Investments at Penzance, in a statement. He emphasized that the combination of assets allows the firm to "deliver strong risk-adjusted returns for our fund investors."

Navigating Complex and Shifting Local Markets

While Penzance cites "limited new supply" as a key driver for its investments, a closer look at the target markets reveals a more nuanced picture. The firm is stepping into dynamic environments where supply, demand, and affordability are in constant flux.

In Charlotte, the market has recently shown signs of softening after years of rapid expansion. Data from late 2024 indicated that while long-term fundamentals like population and job growth remain robust—with employment expanding 2.7% annually—a significant wave of new construction has put downward pressure on rent growth. Over 17,000 new multifamily units came online in 2024, leading some property managers to anticipate rent decreases. However, net absorption also hit near-record levels, suggesting the city continues to attract new residents who can quickly fill available units. Penzance's acquisition of the older Presley Oaks community appears timed to capitalize on this dynamic, offering a more affordable alternative to the new, higher-priced developments.

The situation in Asheville is even more dramatic. The city is bracing for a record influx of 3,549 new apartment units in 2025, a staggering 13.1% increase in its total inventory—the highest proportional increase in the nation. This supply shock is widely expected to drive up vacancy rates and flatten rent growth, particularly in the high-end segment. Furthermore, the region is still grappling with the economic and infrastructural aftermath of Hurricane Helene, which struck in late 2024. Penzance's build-to-rent project, Arden Ridge, with a groundbreaking planned for early 2026 and deliveries in 2027, is timed to come online after this initial supply wave is absorbed, potentially positioning it to meet demand in a re-stabilized market.

The Enduring Allure of the Sun Belt

Despite these local complexities, the acquisitions underscore a powerful, overarching trend: the sustained flow of institutional capital into the Mid-Atlantic and Sun Belt. With a series of successful funds, including its most recent $500 million Fund III, Penzance has the backing of major institutional investors who see long-term potential in the region's economic story.

The strategy is not unique to Penzance. Competitors like Drucker + Falk have found success revitalizing older properties in Virginia, while institutional giants continue to pour capital into markets from Charlotte to Asheville. Drew White, a Senior Managing Director at the investment sales firm Berkadia who was involved in the transactions, praised Penzance's ability to navigate these deals, noting the firm's "solution-oriented approach to acquisitions, allowing Penzance to meet the needs of various sellers on tight timelines."

This influx of investment is a direct response to powerful demographic and economic tailwinds. The Carolinas and Virginia continue to attract new residents and businesses with a combination of job growth, lower cost of living compared to major coastal hubs, and quality of life. For renters, this institutional interest is a double-edged sword. It can lead to professionally managed properties with modern amenities and new housing options like the Arden Ridge townhomes. However, it also contributes to the rising housing costs and affordability challenges that have become a major topic of public debate. In Asheville, for instance, voters recently approved a $20 million bond for affordable housing, a clear signal of the growing pressure on local residents.

As Penzance looks ahead to further expansion in 2026, with plans to invest from New Jersey to South Carolina, its recent $200 million play serves as a case study in modern real estate investing. It is a strategy built not on a single market or asset type, but on a diversified portfolio designed to weather local turbulence while riding the powerful current of regional growth.