As one of the premier apartment complexes in the Triangle, it came as no surprise that the Apartments at Meadowmont in Chapel Hill sold for a premium late last week.
What was surprising was just how much of a premium.
The $37 million paid by Greensboro-based Bell Partners amounts to $143,000 per unit, a price not seen in the Triangle for several years.
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"It's completely out of context with everything that has sold so far," said Jim Scofield, CEO of the Raleigh real estate company Apartment REP.
Sales of apartment buildings, on a per unit basis, have been declining since late 2007 after reaching as high as $180,000 per unit during the commercial real estate boom.
Scofield noted that the per-unit price in last week's Meadowmont sale was 38 percent higher than the recent high-water mark in the Triangle - the sale last summer of the Ashley Park at Brier Creek apartments for $39 million, or $104,000 a unit.
Meadowmont's buyer was Bell Fund III, an ownership entity sponsored by Bell Partners and Bluerock Real Estate. Bell Partners owns or manages about 5,000 units in the Triangle, including The Beckanna on Glenwood in Raleigh and The Stratford Apartments in Cary.
The Meadowmont purchase fit with the company's acquisition strategy, said Joe Cannon, Bell's vice president of investments.
"We've been selectively trying to acquire high-quality assets throughout this downturn at prices you couldn't get before," Cannon said.
Meadowmont is the third acquisition that Bell Fund III has made in recent months. The fund bought a 180-unit apartment building in Dallas in September and a 282-unit community in Jacksonville, Fla., in December.
Bell bought Meadowmont from Crosland, the Charlotte developer that built the 258-unit complex in 2001. Cannon said the list of potential buyers for Meadowmont was small.
"It was a very selective, small process," he said.
Meadowmont is seen as a unique property for several reasons.
Orange County, and Chapel Hill in particular, is considered among the best apartment markets in the Triangle. The county has not had a crush of construction in recent years, and rents there continued to rise long after they began flat-lining in other Triangle markets.
The Apartments at Meadowmont includes nearly 300,000 square feet of rentable space, which is 97 percent occupied. The 19 buildings are next to Meadowmont Village, a 435-acre master-planned development adjacent to the Chapel Hill Country Club and across Highway 54 from Finley Golf Course.
"It's a trophy community in a very sought-after, supply-constrained marketplace," Scofield said.
ABOUT JIM SCOFIELD
Jim Scofield is a Senior Investment Advisor and CEO of Apartment REP. He is a licensed North Carolina Real Estate Broker with more than 30 years of Commercial Real Estate experience. Scofield has extensive background and experience representing private investors, small businesses and large corporations in the analysis, sale, purchase and lease of commercial properties. His career highlights include CoStar Power Broker, SVN TOP 10 Advisor, Partners Circle, Achievers Award, and Humanitarian Award.
ABOUT APARTMENT REP
Apartment REP is a client-focused, full-service brokerage and advisory firm specializing in multifamily commercial real estate. They combine local expertise with a national network of apartment real estate professionals serve apartment owners across the United States. For more information please visit our website: www.ApartmentREP.com