Chattanooga's booming Southside has attracted a record purchase price for a Chattanooga apartment complex from a San Francisco-based investment group.
Hamilton Zanze, a privately held real estate investment company in California, bought the Bluebird Row Apartments behind the Chattanooga Choo Choo earlier this month for $63.15 million from the company that built the 283-unit complex two years ago, according to property deed filings with the Hamilton County Register of Deeds.
The purchase price is equal to $223,145 for each of the apartments, which is also a record high for any major apartment complex sold in Chattanooga. The 306,411 square feet of apartments grouped in four different buildings include one, two- and three-bedroom units that currently rent for anywhere from $1,249 up to $2,334 per month.
The Birmingham, Ala.-based Choo Choo Residences LLC, a subsidiary of LIV Development LLC, built and opened the $45 million complex along Passenger Street in late 2018. The developers, who previously built the CityGreen at North Shore apartments off Dayton Boulevard in Chattanooga, paid $5.25 million for the site behind the Choo Choo where passenger trains once entered the 1908 train station before such service ended a generation ago.
Adam Kinsey, the son of former Chattanooga mayor Jon Kinsey and president of the Chattanooga Choo Choo, led the sale of the property, which was once used to house Track 29. Kinsey said the record high sales price for the Bluebird Apartments this month "is a testament to the appeal and growth in the Southside and the quality of these apartments."
"We picked a great developer for these apartments, sold them the land and ultimately they've hit a home run," Kinsey said Thursday.
Bluebird Row apartments / Staff photo by Dave FlessnerThe new buyers of Bluebird Row, Hamilton Zanze Properties, has acquired more than $4.5 billion of multi-family housing projects across the United States since the company's start in 2001. Hamilton Zanze bought five other multi-family housing developments in metro Nashville, including a recent $53.3 million acquisition of a 248-unit apartment complex in Spring Hill, Tennessee.
Such outside investment interest in Tennessee is bidding up the price and development of more apartments. In Hamilton County, more than $400 million of local apartment complexes have been bought or built by outside investment firms in the past four years.
"Chattanooga is still seen as an attractive market for many investors, especially the Southside," said Henry Glascock, a commercial real estate auction company owner who has worked in the real estate industry for 47 years. "This economy has a lot to do with the higher property prices we're seeing," "
Glascock said the record low mortgage rates are allowing investors to borrow at lower costs and pay bigger prices for their acquisitions.
Officials with Hamilton Zanze were not available Thursday. But the deed indicates the Bluebird Apartments were sold to 12 limited partnerships, including Dkt Bluebird Llc, Gkd Bluebird Llc, Jf Bluebird Llc, Jsc Bluebird Llc, Kec Bluebird Llc, Met Bluebird Llc, Mwd Bluebird Llc, Rhh Willows Bluebird Llc, Srd Bluebird Llc, Szd Bluebird Llc, Wpg Willows Bluebird Llc, and Hz Bluebird Row Llc.
Contact Dave Flessner at dflessner@timesfreepress.com or at 757-6340