“We are excited to add this high-quality asset to our growing portfolio and continue our strategic expansion in suburban Atlanta,” said Dan Chamberlain, Managing Partner. “Suburban, garden-style and mid-rise multifamily has demonstrated material resiliency throughout the Covid-19 spread. We have been able to add several well-placed assets worth over $100 million this year focusing primarily on submarket stability and employment diversity. We look to accelerate this strategy into 2021.”
Located in the Peachtree Corridor directly off I-85 and I-285, the property provides residents exceptional access to some of Atlanta ‘s largest economic centers, such as Buckhead, Perimeter Center, Emory/CDC, Clifton Corridor, and Midtown. The property features a mix of one- and two- bedroom units with large floorplans averaging 1,011 square feet. Community amenities include balconies, nine-foot ceilings, a state-of-the-art fitness center and cardio studio, dog park with agility equipment, large saltwater swimming pool, outdoor stainless-steel grilling stations, and a parking deck with covered parking.
“This investment gives us the opportunity to secure a core-plus, institutional-quality asset at an attractive basis, with both revenue and operational upside potential,” said Doug Fraser, who leads the acquisition efforts for the firm. “The asset is well-located in a high barrier-to-entry submarket that has exhibited persistent demand growth and limited new supply,” says Fraser. “With only one multifamily asset under construction in the submarket, a mid-rise product with replacement costs well in excess of our asset’s all-in basis, we expect the supply shortfall to put upward pressure on rental rates, helping us to capitalize on our business plan. These favorable supply-demand characteristics have resulted in average rent growth over 6% annually since 2015 and one of the lowest vacancy rates in the metro, further reinforcing our investment thesis.”
The property was 96% occupied at the time of acquisition.
This acquisition marks the fourth investment from 37th Parallel ‘s inaugural fund. 37th Parallel Fund I, launched in November 2019, seeks to acquire value-add and core-plus multifamily real estate in the Southeast and Texas. “The purchase of Hawthorne at Clairmont in Atlanta further diversifies the fund portfolio and brings some excellent upside potential for our investor family,” says Chad Doty, Managing Partner. The fund has made investments in Dallas, Austin, San Antonio, and now Atlanta.
The Hawthorne acquisition, structured as a joint venture with Sophus Investments, was funded with a blend of 1031 Exchange equity, 37th Parallel Fund I equity, and new investor capital from Sophus Investments. “We are thrilled to partner with 37th Parallel on this compelling opportunity as we look to grow and provide communities with access to clean, safe, and quality affordable housing, all while delivering attractive returns for our investors,” says Vinay Upasani, President of Sophus Investments.
The asset will benefit from floating-rate agency debt financing, arranged by Cutt Ableson and Colin Marusak of Berkadia. The properties will be managed on-site by First Communities, based in Atlanta, who manage over 18,500 units in metro area and over 57,000 units overall. 37th Parallel extends its appreciation to Kevin Geiger of CBRE’s Southeast Multifamily Team, who represented the Seller in the transaction.
The property is undergoing a complete rebrand and has taken the new name of Haven on Peachwood. Community-wide renovations will accompany the new brand.
ABOUT 37th PARALLEL PROPERTIES
37th Parallel Properties Investment Group is a privately-held, multifamily real estate investment firm based in Richmond, VA. Founded in 2008, 37th Parallel has acquired and managed over 5,200 units and completed transactions totaling $635 million across the Southeast and Texas, all while maintaining a 100% profitable track record for its family of high net worth, family office, and institutional investors.
To learn more, visit www.37parallel.com.
ABOUT SOPHUS INVESTMENTS
Sophus Investments is a real estate investment firm based in Los Angeles, CA. Sophus’ mission is to create meaningful impact in communities while providing attractive returns for their investors and partners.