A Los Angeles real estate investment firm that has acquired nearly 250 apartment properties across the country over the past eight years is entering the Chattanooga market with a $35.7 million purchase of one of the biggest apartment complexes in Red Bank.
TruAmerica Multifamily bought the 226-unit Ridgemont at Stringers Ridge apartments in the biggest real estate transfer in Hamilton County last month, according to county property records.
Investors paid nearly 70% more than what a Minnesota-based investment group, Timberland Partners, paid three years earlier to buy the Ridgemont apartments. Timberland renovated most of the units in the 30-year-old complex.
Ridgemont at Stringers Ridge is TruAmerica's first acquisition in Chattanooga and its third in Tennessee in the past 10 months. Built in 1988, the property features a mix of one- and two-bedroom apartment homes along with amenities including a swimming pool, fitness center and dog park. Ridgemont also is the only apartment community with a trailhead on Stringer's Ridge, a 92-acre nature preserve with popular walking, mountain biking and hiking trails.
Matt Ferrari, co-chief investment officer at TruAmerica, said the new owners plan to complete the renovation of the last 32 apartments as well as make other upgrades to the complex.
"We've been very active in the Sunbelt and done acquisitions in both Nashville and Atlanta," Ferrari said. "Chattanooga is right in between those markets and is a strong market we wanted to be in. While this property was taken care of and operated well by its previous owner, we felt there was still some room to make some renovation and take advantage of tailwinds of the market."
The purchase may not be the last in Chattanooga for TruAmerica.
"Our preference is to own multiple properties in the market," Ferrari said. "Chattanooga checks all the boxes when it comes to demand drivers we look for in a multifamily market. Its heightened level of affordability and continued in-migration were several of the key factors that we valued prior to entering this new market."
The rising investment interest in properties like Ridgemont at Stringers Ridge is part of a growing appeal among major Chattanooga apartment complexes by national real estate investment firms.
Over the past six years, national real estate investment firms have collectively spent more than $500 million to acquire dozens of multi-family complexes in the Chattanooga area, according to county property sales records.
"We're seeing healthy price appreciation across the country and especially in the Sunbelt," Ferrari said.
Rising rents that have accompanied the trend have drawn complaints from affected tenants.
In addition to the sale of the Ridgemont apartments, Tag Manufacturing last month sold its buildings in the Enterprise South Industrial Park for a combined $40.7 million to a New York real estate investment firm, W.P. Carey, which is one of the nation's largest leaseback real estate investment trusts.
Another major real estate sale last month involved the Holiday Inn at Hamilton Place on Center Street, where VND Chattanooga LLC bought the 10-year-old hotel from KBS Hotel LLC for $12.5 million.
Contact Dave Flessner at firstname.lastname@example.org or at 423-757-6340.
Biggest property sales in October
1. Ridgemont at Stringers Ridge apartments at 20 Mason Drive in Chattanooga, $35.7 million
2. TAG Manufacturing facility at 6989 Discovery Drive in Chattanooga, $20.7 million
3. TAG Manufacturing plant at 7080 Discovery Drive in Chattanooga, $19.97 million
4. Holiday Inn at Hamilton Place motel at 2232 Center Street, $12.5 million
5. J. Alexander's restaurant building at 2215 Hamilton Place Boulevard, $6.8 million
Source: Hamilton County Register of Deeds