For the fourth time in the past couple of years, commercial real estate buyers have acquired a major East Brainerd apartment complex as outside investors continue to buy into the Chattanooga market.
The Ledford at Hamilton Place, a 121-unit apartment complex built in 1979, was sold this month to a group of limited real estate partnerships for $16.4 million. The 7.4-acre apartment complex at 1701 N. Concord Road includes one-, two- and three-bedroom units and is currently more than 95% occupied, according to the Meridian Management Group, which will continue to manage the Ledford apartments.
Don Dguyen, a partner in the real estate investment group MF Equity Partner in Houston, said the new owners plan to refurbish the Ledford Apartments, starting in the first quarter of next year.
“We plan on improving the community and really upgrade the interiors with new appliances, countertops, cabinetry, flooring and other changes as needed to make the property feel newer for the residents there,” Dguyen said in a telephone interview. “We’re still in the works determining exactly the scope of work that we’ll be doing, but we’ll try to add some amenities such as pergolas, grilling stations and a dog park.”
MF Equity Partners, which organized the purchase group, previously bought the Park Lake Apartments in Rossville, Georgia.
“The Chattanooga area has strong income and population growth with lots of people moving there so it has a lot of good economic drivers that we’re excited to be a part of,” Dguyen said.
The buyers include four limited liability corporations led by Carp Ledford LLC in Houston, Texas. The buyers are paying the equivalent of $135,500 per unit at the Ledford apartments. The complex just south of the Hamilton Place mall includes a clubhouse, swimming pool, fitness center, tennis court and picnic and pet areas.
According to Apartments.com, the average apartment rent in the Hickory Valley and Hamilton Place mall area is $729 for a studio apartment, $1,157 for a one-bedroom apartment, $1,424 for a two-bedroom apartment and $2,057 for a three-bedroom apartment. Rents in the area rose an average 10.4% in the past year, according to Apartments.com.
The sale of the Ledford at Hamilton Place came a month after the Meridian at Hamilton Place apartments sold for $31.8 million to an investment group affiliated with Brookside Properties in Nashville. That complex at Gunbarrel and East Brainerd roads was built in 1977 and previously sold in 2019 for $22.5 million.
The Shoptaw Group in Atlanta paid $46.8 million last year to buy the 316-unit Parc 1346 apartment complex on Gunbarrel Road and paid $32 million in 2020 for the 252-unit Shallowford Apartment Homes.
The East Brainerd apartment sales are among nearly $500 million of purchases of multi-family housing developments in the Chattanooga area over the past three years by national and regional real estate investment groups.
Henry Glascock, a real estate appraiser in Chattanooga for the past half century, said Chattanooga's appreciating property values for apartments continue to attract investor interest in the market. Although prices and sales of single-family homes have begun to decline in Chattanooga as mortgage rates have doubled over the past year, investor interest in multi-family housing has remained robust, Glascock said.
"I've been doing this for 50 years and I can't believe what I am seeing," Glascock said in a telephone interview Monday. "There continues to be a lot of investment demand for apartments in Chattanooga with our occupancy rates staying relatively strong and the market still growing here. Many investors are seeing more opportunity putting their money in these types of real estate projects right now than they do other types of investments."