Michaels Organization to break ground on $88M Davis apartments with Japanese partners

Michaels Organization is set to break ground in downtown Davis on The Lumberyard, an $88 million apartment project. Connect CRE reports that the national residential operator is ready to start the project with two Japanese partners: Kyuden Urban Development America and JOIN, the Japan Overseas Infrastructure Investment Corporation for Transport & Urban Development. The site is the former Hibbert's Lumberyard and Hardware Store.

The building will rise five stories at G and 5th Streets. Its 239 apartments sit above ground-floor commercial space. Five percent of the units are set aside for households earning no more than half the area median income.

This is Michaels' first partnership with either Japanese firm, according to the same report. The operator is a familiar American name in residential real estate, while the money behind the project comes from Japanese institutions. A ground-up development needs land, approvals, and committed money; the pairing supplied all three.

Michaels CIO Michael Flannagan told Connect CRE that working with the two teams to reach financial closing 'has been a wonderful experience' and that the partnership would be 'transformative.' The words describe the relationship; the closing itself is the harder milestone, complete before any ground is broken.

Private Real Estate Daily's roundup this week included a $3.9 million warehouse purchase in Hudson, New Hampshire. The same roundup noted a $135 million industrial acquisition in Charlotte. Both were purchases of existing buildings. The Lumberyard is a construction play, with equity from across the Pacific.

The affordable share is modest, at five percent. It is fixed in the project's 239-unit plan from the start, not tacked on after the fact.

The Lumberyard name survives the change of use, from hardware to apartments. The first test of the Japanese capital will come at the leasing office, not at the groundbreaking.