RADCO Keen on Atlanta
- Sep 15, 2015
By Keith Loria, Contributing Editor
The RADCO Cos. has acquired Andover at East Cobb and Crossing at McDonough, both Atlanta, Ga.-based multifamily developments, from Wilkinson Real Estate Advisors, Inc. for $53.4 million.
“These properties were particularly appealing due to their immediate market-to-market opportunities because we saw the potential to increase rents after upgrading them to modern standards,” Peter Fitzgerald, RADCO’s principal & COO, told Commercial Property Executive. “They are both underperforming similar assets in their respective submarkets, which shows room for immediate improvement in terms of both rent and occupancy growth, in addition to being well-located in areas with strong economic drivers and excellent growth potential.”
Originally constructed in 1983, the 302 units at Andover at East Cobb average 1,072 square feet, while the 252 units at the 2005-built, Class A Crossing at McDonough’s apartments average 1,147 square feet. Community amenities at both include resort-style pools, fitness facilities and business centers with Wi-Fi.
Both properties were immediately rebranded upon closing, with RADCO planning to invest $4 million at Winterset at East Cobb and $2.5 million at Crossings at McDonough to upgrade units, revitalize their amenity packages, and complete exterior improvements.
“These improvements will add value to both assets, as well as make them more competitive in their respective markets,” Fitzgerald added. “We seek well-located assets with the potential to raise rents and deliver higher returns through excellent management, higher-quality units and modernized amenities. Both have good bones and have been managed well during their lives, so RADCO will further capitalize on this enormous opportunity.”
Both properties are in locations with tremendous current job creation. Winterset at East Cobb is near the Atlanta Braves’ new development site, which is attracting corporate relocations, new civic development, plus stadium construction jobs and all of the jobs needed to operate a $1 billion mixed-use development. Meanwhile, Crossings at McDonough benefits from its location in between the Port of Savannah and Hartsfield Jackson International Airport.
According to Fitzgerald, the nation has seen an influx of capital, including a large amount of foreign investment, into strong Class B and C multifamily assets with value-added potential.
“Atlanta has been one of the main targets of this strategy,” he concluded. “Both properties already have steady cash flow and attractive returns, so we are pleased to add them to our multi-family portfolio, which includes about 7,500 units in the metro Atlanta area, and we will further capitalize on this strategy in the coming months.”
RADCO’s portfolio now includes 44 multifamily assets and 12,515 units, with an additional 1,301 units under contract, which should close in the next two months.