Photo by Dave Flessner / An Atlanta investment firm is buying the 124-unit Views of Signal Mountain apartments for $12.5 million as part of a record year for apartment sales in Chattanooga.

An Atlanta-based real estate investment firm has bought The Views of the Signal apartments as part of a record buying spree of Chattanooga's multi-family housing units in 2020.

Beechwood Holdings in Atlanta bought the 124-unit apartments at 701 Morrison Springs Road in Chattanooga for $12.5 million, according to property records filed this week with the Hamilton County Register of Deeds. Kyle Collins, principal for Beechwood Holdings, called the acquisition "part of our strategy to own and operate well-located multifamily assets in the Southeast."

"We were attracted to the growth of Chattanooga and its future prospects," Collins said. "Our plan is to continue renovating and improving the property for our tenants."

Rents for the two-bedroom units at the Views of Signal Mountain range from $949 to $1,049 each. The complex, which was built in 1973, includes a swimming pool, fitness center and pet play area.

The sales price for the Views at Signal Mountain is equal to $100,806 per unit. That's 21% below the $128,242 average for the 3,147 multifamily units that were sold elsewhere in Hamilton County so far this year, according to real estate filings through the first 11 months of 2020.

There has been more than $400 million of sales of multi-family housing properties in Chattanooga so far in 2020, nearly double the $233 million of multifamily sales in all of 2019. Four of the five highest prices ever paid for Chattanooga apartments have come from sales to real estate investment firms in the past year and a half, including the $63.15 million purchase of the BlueBird Row Apartments in March and the $46.8 million purchase of the Parc 1346 apartments last month.

Robert Fisher, a commercial Realtor for Keller Williams Realty who specializes in multi-family housing, said the growth in Chattanooga and the drop in interest rates has driven up values for apartment properties. With Fannie Mae and Freddie Mac loans hovering around 3% for 30-year, non-recourse loans, "the money is almost free," Fisher said.

"The lower interest rates help all of the commercial assets classes in terms of higher prices for income-producing assets," he said.

The average price per door for 2020 is now 49% higher than the average for 2019, Fisher said.

With more Millennial generation workers putting off the purchase of homes, demand for apartments should continue to grow even with the thousands of new units added to Chattanooga's market in the past five years.

"The future for multifamily looks extremely attractive over the next five to 10 years," Fisher said. "Even with the billions of dollars of new apartments, the supply lags the demand."

Fisher said investors are looking for properties primarily in the South and Chattanooga is still priced well below markets such as Atlanta and Nashville.

That has helped drive up average apartment rental rates. A study of apartment rental rates released last week by the online rental service Zumper showed the average two-bedroom apartment in Chattanooga is renting for $1,200 a month, or 17.6% more than a year ago. Although Chattanooga apartment rental rates average 19.3% less than the U.S. average of $1,487 for a two-bedroom unit, Chattanooga rental rates are rising at some of the fastest rates in the country and more than six times the growth in average income in the past year.

Contact Dave Flessner at or at 757-6340