Executive Summary
Hawthorne School Apartments presents a unique investment opportunity in St. Louis, Missouri, specifically the centrally located municipality of University City (named after Washington University). This historic property, an adaptive reuse of the former William Ittner designed Nathaniel Hawthorne Elementary School, offers a blend of classic architecture and modern amenities and is listed on the National Register of Historic Places.
Historic Charm and New Construction
The property offers the best of both worlds in that the original school retains its historic charm while providing contemporary living spaces, attracting tenants who appreciate character and convenience. The school was originally built in 1930 and renovated in 2020. There are 47 total units on the property of which the main school includes 35 apartments. In addition, the owner developed 12 brand new two-story townhomes on the site in 2020.
Community amenities include a fitness center, community lounge, pavilion with BBQ grills, and beautifully landscaped outdoor spaces adjoining Millar Park. Millar Park features a children’s playground, picnic pavilion, baseball, football and soccer fields, and a half mile jogging trail with fitness stations on over 12 acres.
Prime Location
Hawthorne is situated in the heart of University City, close to Washington University and major employers nearby in the Clayton CBD (county seat of St. Louis County). Some of the largest nearby employers include Centene Corporation, Enterprise Holdings world HQ, Graybar Electric Company, Washington University, and Barnes Jewish Hospital. The nearby Delmar Loop, features vibrant cultural attractions, eclectic mix of shops, restaurants, and entertainment venues.
Strong Rental Demand
Proximity to educational institutions and employment hubs ensures steady demand for rental units. Since stabilization, Hawthorne has been consistently 100% occupied. St. Louis rent growth outpaces the national average and is projected to accelerate into 2025.
Greater St. Louis ranked among the top 20 multifamily markets for the highest annual increase in effective rent in the first half of 2024.
Financing : Assumable HUD Loan
The property is encumbered by a very favorable assumable HUD loan with an interest rate of 3.32% and loan maturity in February 2060, ensuring a buyer will achieve long-term steady cash flow and appreciation.
Investment Highlights
Attractive Assumable Debt:
Fixed-rate HUD loan at 3.32%, current loan balance ~$5.9 million, loan maturity in 2060.
Desirable Unit Mix:
Adaptive reuse conversion of a former school into 35 multifamily units plus 12 newly developed townhomes offer a blend of historic charm with large floor plans and modern amenities.
Turnkey Rental Community with Operational Upside:
Hawthorne School is a well-maintained community that allows a new owner to step into stable, in-place operations while pursuing targeted efficiency gains. With minimal immediate capital needs, an investor can focus on optimizing rents, expenses, and management practices rather than funding a heavy renovation program. This “plug-and-play” profile supports a capital-light business plan, creating an attractive opportunity to drive outsized returns through strategic operational calibration rather than large upfront investment.
Employment Arterial:
The property is centrally located five minutes north of the downtown Clayton business district, the county seat of St. Louis County. Clayton features a daytime population of over 46,000 and 3,400+ businesses. Major nearby employers include Washington University, Enterprise Holdings World HQ, Emerson Electric HQ, Boeing Defense HQ, BJC HealthCare, Centene Corporation, Edward jones, Graybar Electric, Olin, and Energizer Holdings.
Expansion Opportunity / Underutilized Land:
The Hawthorne School offering includes an additional land parcel directly to the south of the existing school building, presenting a compelling, built-in development opportunity. Already zoned for high-density residential, the site provides a clear path for a future phase of multifamily construction, enabling an investor to meaningfully increase unit count and scale on an in-place, proven asset. By leveraging the existing identity, infrastructure, and leasing momentum of Hawthorne School, a new owner can pursue a complementary expansion that enhances overall economies of scale, operating efficiency, and long-term value creation – without the entitlement risk typically associated with ground-up development. This rare combination of stabilized income and ready-to-develop land delivers significant optionality for both immediate and future growth.
PROPOSED EXPANSION OPPORTaUNITY
The property includes an additional land parcel on the south side of the historic school building, giving an investor the rare ability to own a cash-flowing asset while concurrently developing new units. In 2017, University City approved a zoning map amendment for the site from PA (Public Activity District) to HR (High Density Residential), the city’s high-density multifamily district. This HR designation permits a range of residential product types, including townhomes, garden-style apartments, and elevator-served buildings, providing meaningful flexibility in both design and density for a future expansion phase.
The existing asset is encumbered by a HUD 221(d)(4) loan that a purchaser will be required to assume. Following assumption, a buyer may pursue additional development using the HUD 241(a) supplemental loan program to finance new units behind the existing first mortgage. The 241(a) execution would be subject to Davis-Bacon prevailing wage requirements on the construction and generally offers attractive leverage and coverage parameters – up to 90% of cost, with a minimum 1.11x DSCR, structured on a coterminous basis with the existing 221(d)(4) loan.
Alternatively, an investor could refinance the property with a HUD 223(f) loan, which would reset the interest rate and would not require Davis-Bacon wages for future capital work or expansion. This creates a strategic financing decision point: retain and supplement the current execution via 241(a) or recapitalize through a 223(f) refinance to optimize long-term debt costs and construction wage requirements.
For detailed program terms, underwriting criteria, and current HUD guidance, please refer to the Berkadia FHA HUD 241(a) Program Sheet available in the document center.
Property Description
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UNIT MIX
- 19 one-bedroom units measuring ‘845 square feet
- 16 two-bedroom units measuring between 1,056 and 1,211 square feet
- 12 two-bedroom, two and one half-bath townhomes measuring 1,152 square feet each
Amenities
INTERIOR FEATURES
- Charming Historic School Converted into Modern Apartments in the Heart of University City
- Original Architectural Details Include Wide Corridors, Sweeping Staircases, Original Lockers, Brick Details, Artwork, Built-In Bookshelves, Oversized Windows, and High Ceilings
- Clubroom (Former Gym) with Entertainment Space, Catering Kitchen with Island Seating, Billiards, and Media Room
- 24-Hour Fitness Center with State-of-the-Art Cardio and Weightlifting Equipment and Free Weights
- Business Center
- High Speed Wi-Fi Internet Access
- Covered Picnic and Grilling Area
- Green Building
- Elevator and Indoor Community Mailbox Area
- On-Site Management and Maintenance
- Bicycle Storage Room
- Plenty of Convenient, On-Site Parking
- Controlled Access – Secured Entrance and Security Cameras
- Beautifully Landscaped with Green Space, Manicured Grass, Mature Trees, Flowering Plants, and Trimmed Shrubs
- Online Resident Portal / Smartphone Application with Rent and Maintenance Request Acceptance
- Next to the 12.2-Acre Millar Park with Playground, Athletic Fields, Picnic Shelter, and a Half Mile Trail
- Within Walking Distance of Public Transportation (Metro Bus Line), Markets, Pharmacy, Stores, and Restaurants
- Close to Downtown Clayton, Delmar Loop, Metro Train Station, Forest Park, Schools, Golf Courses, Trails, and Entertainment Options
- Convenient Access to Interstate 170, State Route 340, St. Louis Lambert International Airport, Washington University in St. Louis, St. Louis University, and Downtown St. Louis
COMMUNITY FEATURES
- Variety of Unique Open Floor Plans Including Loft-Style Units and New Two-Level Townhomes
- Beautifully Appointed with High-End Finishes Including Stainless Steel Appliances, Quartz Countertops, Shaker-Style Cabinetry, Hardwood Flooring, Subway-Tiled Backsplash, Ceiling Fan, and Mini Blinds
- Loft-Style Finishes Include Original Hardwood / Gym Flooring, Exposed Brick / Ductwork / Plumbing / Electric, Metal Railings, High Ceilings, and Oversized Windows
- Two-Bedroom Townhomes Feature Walk-In Closets, Breakfast Bar, and Powder Room
- Kitchen with Electric Stove, Glass-Top Range, Refrigerator, Built-In Microwave, Dishwasher, Disposal, Double Basin Sink with Gooseneck Faucet, Dining Area, and Plenty of Cabinet and Counter Space
- Full Size Bathroom with Tub and Shower Combination
- Generous Storage Space
- In-Unit Washer and Dryer
- Select Units Feature Patio / Terrace, Kitchen Island / Breakfast Bar, Pantry / Storage Closet, Walk-In Closet, Fireplace, Den, and Semi-Private Covered Entry
- Air Conditioning / Heating and High-Speed Internet Access (1,000-MBPS Personal Wi-Fi Access)
Location
Photo Gallery
Contact Us
ST. LOUIS OFFICE
120 S. Central Avenue
Suite 1200
St Louis, MO 63105
Investment Advisors
ANDREA KENDRICK
Managing Director
314.984.5591
[email protected]
Ken Aston
Managing Director
314.984.5590
[email protected]
Mortgage Bankers
KEVIN KOZMINSKE
Senior Managing Director
314.984.5514
[email protected]
PAT GARLICH
Director
314.984.5536
[email protected]
CORTNEY MAULDIN
Managing Director
314.322.3463
[email protected]
HAWTHORNE SCHOOL
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