Louisville Apartment Property Trades for $22.5M

The Chicago-based Infinity Group has sold Vieux Carre Apartments, a 326-unit complex in Louisville, for $22.5 million.

Louisville, Ky.—The Chicago-based Infinity Group has sold Vieux Carre Apartments, a 326-unit complex in Louisville, for $22.5 million. The price represents just over $69,000 per unit and a cap rate of 7.25 percent.

The sale marks the highest price ever paid for 1970s-era construction, according to Marcus & Millichap Research Services. It’s also the third-largest single-asset multifamily sale to close in Louisville so far in 2012, a year when investors have been eager to buy in Louisville. And for good reason: According to Reis Inc., the Louisville apartment market will see annual rental growth of 4 percent each year between 2012 to 2016, but the market’s inventory will rise only 1.4 percent annually.

Vieux Carre was developed in two phases in 1974 and in 1979 on the corner of Hurstbourne Parkway and Shelbyville Road in one of the most affluent parts of Louisville. The unit mix includes one-, two- and three-bedroom layouts. Currently 100 percent occupied, the units have recently received a number of upgrades, including new kitchens.

Aaron Johnson, vice president investments in Marcus & Millichap’s Louisville office, represented the seller in the deal. Drew Babcock, a multifamily investment specialist in the company’s Columbia, S.C., office, sourced the buyer, a Nashville-based multifamily investment group.

As the single-family housing market continues to struggle, well-located rental communities are attracting more affluent residents by upgrading existing facilities to meet the increased demand from coveted renters-by-choice, who tend to be high-paying renters, Johnson posits. The record price for ’70s-era construction, he continues, demonstrates the increased desirability of apartments in the Louisville market.