New Apartments in Secondary Markets Lure Institutional Buyers
- Aug 07, 2015
By Adriana Pop, Associate Editor
Cushman & Wakefield’s Atlanta Multifamily Team facilitated the sale of two recently-completed apartment communities in Charlotte and Charleston.
In one of the transactions, C&W represented Florida-based developer ContraVest Development Partners. The company sold The Addison at South Tryon, a 321-unit garden-style asset delivered in 2014 and located in Charlotte’s fast-growing southwest submarket, to a high-profile institutional buyer for $49.1 million (or $152,959 per unit). The property is anchored by the Westinghouse Boulevard office/industrial district and Charlotte-Douglas International Airport.
C&W also brokered the sale of 270-unit Ansley Commons, North Charleston’s newest multifamily development and one of the first to contribute to the city’s surge in suburban new construction.
Hathaway Development Partners sold the property to an undisclosed institutional investor for $39.2 million ($145,122 per unit). Ansley Commons features a modern coastal architecture and strong amenities, which led to an outstanding lease-up performance of 22 leases per month since its first units were delivered in June 2014.
According to C&W, these transactions highlight the continued trend of cap rate compression across major Southeastern multifamily markets, particularly for newly built communities.
“Both assets traded at low, stabilized proforma cap rates. Institutional buyers are entering these markets, buying new construction assets, and hoping to take rents 10-12 percent higher,” explained Brandon Whitesell, the lead C&W broker on both transactions. “This sort of confidence in secondary markets like Charlotte and Charleston is a strong indication that rent growth is not ready to slow down.”