In its second major purchase of a Hixson apartment complex in the past eight months, a national real estate firm specializing in tax-advantaged real estate investments has bought the Integra Vistas apartment complex near Highway 153 and U.S. 27.
Capital Square 1031, a Glen Allen, Virginia-based investment firm established in 2012, bought the 280-unit property for $57.2 million, or the equivalent of $204,286 for each of the one-, two-, and three-bedroom units in the hilltop development.
The purchase price for the Hixson apartment in the second highest ever for an apartment complex in Hamilton County, behind only the $63.1 million sale in March 2020 of the Blue Bird Apartments near the Chattanooga Choo Choo in downtown Chattanooga.
Louis Rogers, founder and chief executive of Capital Square, called the Integra Vistas a "class A multifamily asset with strong resident demographics.
"The affluent Hixson submarket of Chattanooga, where the property is located, has an average projected occupancy rate of 98.3% and projected rent growth of 4.9% for the next five years, according to Yardi Matrix," Rogers said.
Built in 2018 on the former Hillocks farm in Hixson, Integra Visitas apartments range in size from 766 square feet for a one-bedroom unit up to 1,278 square feet for a three-bedroom apartment. The units currently rent anywhere from $1,195 to $1,710 a month, according to Apartments.com.
The Integra Vistas apartments include such amenities as a fitness center featuring free weight and circuit stations, CrossFit training, cardio, yoga and fitness on demand; a pet park with agility equipment; storage lockers; attached and detached garages and walking trails with scenic mountain views.
"The property's strategic location near major local employment hubs coupled with its high-end finishes and best-in-class amenities positions it as an ideal asset for our growing portfolio of investment properties," said Whitson Huffman, chief strategy and investment officer for Capital Square.."
The Lake Mary, Florida-based Integra Land Co. built the 280-unit apartment complex on about 20 acres of the redeveloped farm site. The rest of the property, including the entrance to the apartments off of Highway 153, is slated to eventually be used for new commercial development, which could eventually include a shopping center and other commercial development.
Capital Square is focusing on the apartments and will not be a part of the other development proposed by developer Duane Horton, company officials said.
BH Management Company is Capital Square's third-party manager and recently took over the management of Integra Vistas.
Since the company was founded, Capital Square has acquired 130 real estate assets for over 3,000 investors seeking replacement properties that qualify for tax deferral under Section 1031 of the Internal Revenue Code and other investors seeking stable cash flow and capital appreciation.
The sale of the Integra Vistas property comes eight months after Capital Square Associates also bought the 308-unit Marina Pointe Apartments in Hixson for $44.5 million. Even after investing over $100 million in the Chattanooga market, Rogers said the company is interested in more properties in the market.
Over the past six years, out-of-state investors have collectively spent more than $500 million to buy into Chattanooga's rental market.
Contact Dave Flessner at [email protected] or at 423-757-6340