ATLANTA, GA - Bluerock Residential Growth REIT announced that it has acquired the 480-unit multifamily Nevadan Apartments in Atlanta, Georgia. The Company acquired the property through a joint venture for a total purchase price of approximately $68.25 million, or approximately $142,188 per residential unit.
The acquisition is projected to yield a stabilized pro forma cap rate of approximately 6.5% on execution of the Company's Value-Add upgrade strategy, which compares favorably to estimated market cap rates of 4.75% – 5.25% for comparable assets.
BRG invested 90% of the venture's equity requirement, or approximately $23 million, with an affiliate of the Carroll Organization investing the balance for a 10% stake in the venture. The transaction, which was sourced off market, was further capitalized with a senior loan in the amount of approximately $48 million.
The Nevadan, which was built in 1990, features one-, two- and three-bedroom units averaging nearly 1,100 square feet. It is located within Perimeter Center, one of Atlanta's fastest growing employment submarkets, and features a large clubhouse as well as a resort style swimming pool, poolside grill/lounge, 24-hour fitness center, tennis courts and underground parking.
The property benefits from close proximity to I-285 and GA-400, which provide easy access to employment nodes throughout the city. Three major hospitals, known collectively as ''Pill Hill,'' are five to seven minutes' driving distance from the property and provide approximately 15,000 jobs. An added 9,000 jobs are being created within 3 miles of the property as State Farm and Mercedes-Benz establish new headquarters in Perimeter Center.
"We see significant upside potential for this property and believe it to be a strong addition to the portfolio. The property has good, intrinsic value, while the Perimeter Center submarket and the larger Atlanta MSA show much promise for the coming years. Our ability to source this property at a favorable cost basis makes it possible for us to bring a strong product to market at competitive rents," said Ramin Kamfar, Chairman and CEO of BRG.