Source: Bluerock Residential / #Apartments #Multifamily
ATLANTA, GA - Bluerock Residential Growth REIT announced that it has acquired a leasehold interest in the Class A, 336-unit, mixed-use Tenside Apartment Homes in Atlanta, Georgia to be rebranded the Arium Westside.
The Company acquired the property through a joint venture for a total purchase price of approximately $74.5 million, or approximately $197,900 per residential unit and $205 per square foot of retail space.
The property was built in 2008 and features one-, two- and three-bedroom units averaging approximately 900 square feet. The ground floor retail includes a mix of local, regional and national tenants. The property is located within the vibrant, live-work-play West Midtown sub-market. The transaction was capitalized with a senior loan from Fannie Mae in the amount of approximately $52 million, and BRG invested approximately $22 million for a 90% ownership interest, with an affiliate of the Carroll Organization investing the remaining 10%.
The Company's business plan includes providing growth capital to lease the remaining vacant retail space and improving the exterior curb appeal, amenities, shared spaces and interior units within the multifamily complex. The acquisition is projected to yield a stabilized pro forma cap rate of approximately 6.5%, which compares favorably to estimated market cap rates of 4.75% - 5.25% for comparable assets.
"We see strong upside potential for this property. We believe Tenside's proximity to Georgia Tech University and its location within the gentrifying West Midtown submarket provides an opportunity for BRG to realize rent growth in the coming years as the rent disparity between West Midtown and Midtown is expected to close," said Ramin Kamfar, Chairman and CEO of BRG.