Despite the addition of thousands of more apartment units in Chattanooga over the past couple of years, real estate investors continue to bid up the price of many of the city's biggest residential rental properties.
An investment group organized by The Shoptaw Group in Atlanta last week purchased The Shallowford Apartment Homes in East Brainerd for $32 million. The 252-unit complex, which was built in 2004, was previously purchased in October 2014 for $22.4 million.
The new owners declined to discuss their investment. But company president Walt B. Plyler said the property has gained in value both from the appreciating market and improvements made at the facility.
On Friday, workers were working to put a new roof on top of one of the three-story apartment buildings scattered across the 14-acre site at 7510 Shallowford Road.
The Shallowford Terrace and Villas include one-, two- and three-bedroom units and offer such amenities as a clubhouse, pool, playground, dog park, workout room with weights and picnic and garden area.
The sale of the Shallowford Road apartments is the latest among over $300 million of purchases made by outside investment groups of local apartment complexes in the past three years, according to property sales recorded at the Hamilton County Register of Deeds.
Chattanooga continues to attract outside investment interest even after a building boom of apartments in the downtown area. Since 2015, the downtown development agency River City Co. said the central city and nearby Southside and North Shore have added 3,223 apartment units and 1,917 beds for students at the University of Tennessee at Chattanooga.
Hundreds of apartments have also been added in other parts of Hamilton County and more are in the pipeline.
Despite such additions, rental rates continue to rise faster than income or the economy in general in Chattanooga, according to the online rental service Zumper. The median rent for two-bedroom units in Chattanooga rose 9% in the past year, although the quoted rental rates are often off set by discounts or free move-in incentives.
Chattanooga rental rates are still only about 20% of those in San Francisco, the most expensive rental market where a one-bedroom apartment now rents for $3,720 a month, Zumper said.
Contact Dave Flessner at dflessner@timesfreepress.com or at 423-757-6340.
Biggest apartment complex purchases
Since the start of 2016, investor groups have paid more than $300 million to buy apartment complexes in Hamilton County. The biggest purchases include:› Legends at White Oak in Collegedale sold for $41.8 million› The Shallowford Apartment Homes in Est Brainerd for $32 million› Village at Apison sold for $31.9 million› Elements of Chattanooga on Standifer Gap Road sold for $31 million› Riverview Grande in North Chattanooga sold for $31 million› Bridgeway at Chattanooga on McCutcheon Road sold for $29.5 million› The District at Hamilton Place on Gunbarrel Road sold for $28 million› Arbor Creek Apartments on Standifer Gap Road sold for $26.6 million› Standifer Place Apartments Homes on Jenkins Road sold for $25.5 million› Ridgemont Apartments in Red Bank sold for $21 million› Mountain Brook Apartments on Mountain Creek Road sold for $20 millionSource: Hamilton County Register of Deeds