A Mountain Creek Road apartment complex sold this week for 58% more than what the property sold for just two years ago.
The Rise at Signal Mountain, a 280-unit apartment complex that sold for $30 million in December 2019 and has since been upgraded by a Birmingham, Alabama-based real estate investment firm, was purchased this week for $47.4 million, according to property records filed with the Hamilton County Register of Deeds.
The investment company known as SG Rise LLC organized by the Shoptaw Group in Atlanta bought the Rise at Signal Mountain for the equivalent of $169,286 per unit, reflecting the rise in multi-family prices in the Chattanooga market. The 36-year-old complex includes 19 buildings on 43 acres.
The Shoptaw Group previously bought The Shallowford in East Brainerd with 252 units for $32 million in 2019 and acquired the 316-unit Parc 1346 apartment complex on Gunbarrel Road for $46.8 million. Company officials with the Shoptaw Group declined Thursday to discuss their latest and biggest acquisition yet in the local market.
The former owners of Rise at Signal Mountain, the StoneRiver Co., renamed the Mountain Creek complex from its original Mountain Brook Apartments when they bought the property two years ago.
The sale of the complex is among more than $600 million of purchases in the past year of multi-family housing developments by national investment groups in the Chattanooga market.
Last month, the 280-unit One Riverside Apartments near the Erlanger hospital main campus sold for $84.2 million, or more than $300,000 for each of the units in the downtown complex. The record-high price, both in the overall sale and the average price per unit, valued each apartment above Chattanooga's median home price sale of $280,000 in November, according to the Greater Chattanooga Realtors association.
Henry Glascock, a real estate appraiser and auctioneer, said investors are being lured into buying in Chattanooga by historically low interest rates and rising population, jobs and rental rates in the local market.
"It's an extraordinary market right now, but sophisticated investors are calculating that they can buy these properties and over time bring in more rental income and, ultimately, sell the properties for even more," Glascock said in a telephone interview.
In a new rental rate study, the online housing website Zumper said the average rent for a one-bedroom apartment in Chattanooga rose 20% in the past year to its current monthly average of $1,191.
Contact Dave Flessner at dflessner@timesfreepress.com or 423-757-6340