For the third time in the past month, a major apartment complex in Hamilton County has been sold to real estate investors anxious to capitalize on the region's growing demand for rental housing.
The Mountain Brook Apartments, a 280-unit apartment complex at the foot of Signal Mountain along Mountain Creek Road, was sold last week for $18.5 million — $4 million more than what the previous owners paid to buy the complex just two years ago, according to property filings with the Hamilton County Assessor's Office.
"The quick rise in value of this asset is an indication of the growth in Chattanooga, and we're happy to be a part of it with the rest of our holdings in the Chattanooga area," Elmington CEO Cary Rosenblum said in a statement Monday.
Waypoint Homes acquired Mountain Brook apartments, which include one- and two-bedroom units built in a wooded area on the side of Signal Mountain.
Elmington Capital Group announced the sale of the 20-year-old complex on Monday. Mountain Brook, built in 1986, is one of nearly a dozen multi-family complexes along Mountain Creek Road.
Nashville-based ECG Mountain Ridge LLC bought the complex in September 2014 for just under $14.5 million at the same time it also bought the 226-unit Ridgemont Apartments on Mason Drive in Red Bank. Elmington said Monday it plans to keep the 226-unit Ridgemont Apartments long term.
The purchase of Mountain Brook apartments by Waypoint Homes comes within a few weeks of two other apartment complex sales. Last week, the Chalet at Northshore Apartments in Red Bank were sold for $4.8 million. The Chalet apartments were built in 1970 and include one- and two-bedroom units built around a swimming pool at 4103 Dayton Blvd.
Last month, the biggest apartment sale yet in Hamilton County — the $41.8 million sale of the Legends at White Oak in Collegedale — was closed. A Fort Worth, Texas, investment firm, Olympus Property, bought the new 312-unit facility located on a 21-acre complex just off Ooltewah-Ringgold Road.
Henry Glascock, a Chattanooga property appraiser and broker, said the rising value of apartments reflects the interest by investors in multi-family housing, which is seen as more stable and reliable than retail or other commercial developments for both annual cash flow and property appreciation.
"There's such a demand for multi-family housing, and Chattanooga is seen as a more favorable real estate market right now," Glascock said. "Multi-family has been one of the unique real estate investments because it survived the recession, primarily because the recession in housing was fueling the demand for rental apartments."
Contact Dave Flessner at firstname.lastname@example.org or at 423-757-6340.