Covenant Sells 272-Unit Atlanta Asset for $32M
The deal continues the Atlanta market momentum for Covenant Capital Group, following the company’s sale of the 500-unit Viera Briarcliff in June for $76 million. Mike Kemether and Travis Presnell of Cushman & Wakefield worked on behalf of StoneBridge Investments, the seller, while Elliott Throne, Gregg Shapiro and Ware Shipman of HFF secured acquisition financing.
By Laura Calugar
A fund managed by Covenant Capital Group LLC completed the sale of Veridian Sandy Springs, a 272-unit apartment community in Atlanta, to StoneBridge Investments. The sale closed for $32 million. Covenant purchased the property from Investors Realty Group back in 2013 for $15.3 million and invested $4.8 million in updates and renovations. Mike Kemether and Travis Presnell of Cushman & Wakefield represented the seller, while Elliott Throne, Gregg Shapiro and Ware Shipman of HFF secured acquisition financing through a Freddie Mac loan.
Located at 1800 Windridge Drive, the 17-building Veridian Sandy Springs is 19 miles from downtown Atlanta and 7 miles from Interstate 285. The property sits at the center of one of Atlanta’s largest employment bases, Perimeter Center. According to Yardi Matrix data, the 1982-built property features 182 one- and 90 two-bedroom units, ranging from 650 to 1,142 square feet. Covenant contributed 4.8 million in renovations at Veridian Sandy Springs that included new exterior siding, new windows and an interior update of all units with new appliances, granite countertops and modern finishes. Amenities include a pool, sundeck, tennis court, fitness center, clubhouse, cyber lounge, pavilion and picnic areas, and a “bark park.”
“[The deal] provided strong in-place cash flow in a good location with strong rent growth forecast for the foreseeable future,” William Bateman, director, StoneBridge Investments, said. “It was acquired at well-below replacement cost, and a substantial delta between our renovated rents and newer Class A projects. We have substantial experience in Sandy Springs, and continue to like both the short- and long-term outlook in the submarket, due to continued job growth, a strong school system, and high barriers to entry.
“Generally, we continue to be bullish on well-located suburban Class B product, not just in Atlanta, but also in other major markets. The vast majority of new product in the pipeline right now nationwide is geared towards high-end urban locations that necessitate high-end urban rents. While that has certainly proven to be a successful model, we think that it leaves a large portion of the population underserved. The suburbs remain a vibrant and attractive place to live, and we don’t see that changing any time soon. Affordability is also an increasingly large issue in most US cities, and by renovating older suburban garden properties, we feel that we can fill a need and provide a high-quality product to our residents at a relatively attractive price point.”
Second recent Atlanta sale
The deal marks the second latest sale made by Convent in Atlanta, which sold the 500-unit Viera Briarcliff, now the Madison Druid Hills, for $76 million to IPX MF Druid Hills LLC. For this property, Covenant invested more than $5.3 million in renovations.
“We’re proud of the work we did to revitalize these apartment communities in Atlanta, which both are in burgeoning neighborhoods within the metro area and possess a tremendous long-term outlook,” said Covenant Capital Group Managing Partner & Co-Founder Govan White.
ZRS Management, an affiliate of StoneBridge, will manage Veridian at Sandy Spring.
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Image courtesy Covenant Capital Group website