"The owner needed to sell the asset within a relatively short period of time," says Joshua Goldfarb, managing director with Southeast Apartment Partners. "As such, the sale was distressed and a price discount was given," he explains about the price.
The property is 79% occupied with amenities including tennis courts, a clubhouse and two pools. The buyer plans to spend $2.5 million to improve the property, according to Bob Mascaro, vice president of acquisitions for the southeast region of GFI.
"The previous ownership had foreclosed on the property and had left it to operate on its own," he explains. "We plan to cut the trees back, fix the landscaping and entrance gate, as well as renovate the clubhouse. We will take all of the down units and bring them back up, do some interior renovations and get the property leased up with quality residents."
MAscaro says GFI may be in a good position to sell the complex in two to three years. A profit is sure to be had with the low price paid for such a valuable asset, Southeast Apartment Partners directors agree.
"Selling a 1984 built property at $25,000 per unit will clearly raise some eyebrows," says Marc Robinson, managing director with the firm. "Between the tight credit markets, rising joblessness, increasing oil prices and flat economic outlook, the local perception of Class C apartments is fragile at best." The sale may represent the beginning of the recalibration of values in class C assets in Atlanta, adds Goldfarb.
"Based on our pipeline, we anticipate more sales to occur under similar circumstances. The lag effect of real estate prices will hit soon, following the slowdown seen in our national economy," he says.
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