Apartment complex near Hamilton Place mall sells for $40.5 million

One of the biggest deals ever for an apartment complex in Hamilton County has closed for $40.5 million as the Chattanooga area real estate market continues to ride a wave of investor interest.

The sale of The Haven at Commons Park, a 318-apartment facility near Hamilton Place mall, is the second biggest transaction for a complex in Hamilton County history, said Marcus Lyons of Berkadia Real Estate Advisors in Chattanooga.

Lyons said the Commons Boulevard property that was built in 2008 was part of a deal that included two other apartment complexes in Montgomery, Ala., all valued at $116 million.

"Quality construction, employment growth, high occupancy with qualified residents, coupled with the attractiveness of the current debt market played a key role," he said.

The deal for The Havens is the equivalent of $127,358 per unit.

The largest transaction involving a Hamilton County apartment complex was made about a year ago for the 312-unit Legends at White Oak in Collegedale at $41.8 million. That's the equivalent of nearly $134,000 per apartment.

The Haven at Commons Park was bought by Inland Residential of Oak Brook, Ill., Lyons said. The seller was Flournoy Property Development of Columbus, Ga., he said.

Inland Residential touts The Haven as having won the Chattanooga Beautification Award from 2009-15, and it said the complex has been in the top three in the Best of the Best in Chattanooga during the period.

Rents start at $916 per month for a one-bedroom apartment and top out at $1,359 per month for a three-bedroom unit, according to Inland.

Lyons said he expects the interest by investors in apartments to continue "for the time being."

"There's access to cheap money," he added about the number of deals involving apartments. Lyons said David Oakley and David Wilson of Alabama Berkadia Real Estate Advisors also negotiated The Haven's deal.

Last year, Olympus Property, a real estate company that manages more than 12,000 residential rental units across eight states, paid $41.8 million to acquire the Legends at White Oak.

The 21-acre complex was built in 2015 at the foot of White Oak Mountain along Ooltewah-Georgetown Road just a short walk from Cambridge Square in Ooltewah.

That was part of a string of acquisitions of apartment complexes in Hamilton County over the past year that collectively totaled more than $200 million.

David DeVaney, president of NAI Charter Real Estate who tracks the local market, said investors are looking for better returns and smaller and mid-sized markets like Chattanooga are getting more attractive because there are often better buys and offer more growth potential.

He said Chattanooga also is seen as an appealing city for people to move to and it hasn't been overbuilt like some markets.

Contact Mike Pare at mpare@timesfreepress.com or 423-757-6318.