A Knoxville real estate development company that has already built an assisted living center in Hixson and is building another $20 million of apartments near Northgate Mall is adding to its multi-family portfolio by buying another Hixson apartment complex for $11.3 million.
The Dominion Group last week acquired the 148-unit Ridgeside Apartments at 6302 Hixson Pike as part of a bigger purchase of five apartment complexes across Tennessee. The Nashville-based Freeman Webb company sold the Ridgeside apartment complex, along with other apartments in Knoxville, Nashville and Jackson, Tennessee, to the Dominion Group for a total of $50.5 million.
Kevin O'Brien, director of development for the Dominion Group in Knoxville, said his company sees Chattanooga as a growing rental market even after the addition of thousands of apartment units either built or now under development in the market since 2015.
"Dominion is very excited about the Hixson market and the overall Chattanooga market," he said. "We are well aware of the growth that is taking place in and around Chattanooga. We are particularly excited about what we see trending in the market fundamentals of job creation and employment outlook."
Freeman Webb Chairman Bill Freeman said the higher price reflects the appreciating value of housing in Chattanooga and other Mid-South markets, which helped Freeman Webb realize double- digit returns on their apartment investments.
"These assets are prime for an opportunistic owner looking to place fresh capital into the properties, and we think the buyer will have continued success," he said, noting that the properties are at least 95% occupied.
The Dominion Senior Living facility opened near Abba's House in Hixson in 2016 and Dominion is currently building an 89-unit independent senior living community that will be located just down the road.
"We are also currently evaluating another apartment development project in Hixson to potentially follow our recent Ridgeside Apartment acquisition," O'Brien said.
Dominion paid the equivalent $75,712 for each of the 667 apartment units it is buying from Freeman Webb at Ridgeside and the other four apartment complexes across Tennessee. The former owners acquired or built those apartments from 1993 to 2011 for an average of $17,900 per unit.
Dominion owns and operates nearly 2,000 multi-family apartment units across Tennessee and 17 senior living communities in Tennessee, Kentucky and South Carolina
"We are always comparing purchase price to replacement cost and feel great about the basis for which we were able to obtain this portfolio," O'Brien said of the latest acquisitions.
The rising price of apartments has helped spur 11 major apartment sales of more tan $10 million so far this year in Hamilton County to outside investment firms.
Contact Dave Flessner at firstname.lastname@example.org or at 423-757-6340.