By Jeffrey Steele, Contributing Writer
Birmingham, Ala.—The Birmingham office of Multi Housing Advisors (MHA) recently brokered the recent sales of two Birmingham apartment communities totaling 506 units. The properties, 256-unit High Pointe and 250-unit Brookstone, were sold for $21.1 million by Ruffner Mountain to a Michigan-based LLC.
“The buyer was attracted to Birmingham due to its lack of new supply, and its attractive fundamentals,” Jimmy Adams, MHA managing director, who oversees the firm’s Birmingham office, tells MHN. “Each of these properties had a below-market interest rate associated with the loans that were assumed at closing. I think we will see more loan assumptions over the following 24 months, as interest rates rise.”
Also helping make the transaction attractive were the properties themselves. “There were very high occupancy levels in both properties,” Adams says. “High Pointe was completely renovated with new windows, roofs, siding, balconies, HVAC system and balcony and patio sliding doors three years ago. Brookstone was developed in the mid-1980s, and therefore has an advantage over the largely 1970s-era competition in that submarket.”
One of the challenges that arose in the process of completing the transactions was a degree of trepidation about how long a loan assumption might take, Adams recalls. “But the buyer has a very good relationship with the servicer on the loan, and therefore each closed in less than 60 days from the time of the application submission to the closing,” he reports.
MHA’s Birmingham office has completed 20 investment sales in 2013, and the company as a whole is aiming to close 100 transactions this year. MHA, whose other offices are its headquarters in Atlanta and a Charlotte office, completes deals throughout the South.
The number of apartment sales the Birmingham office has completed this year is a powerful indication of the ongoing demand for multifamily investments, Adams says. “With the apartment sector poised to continue to thrive in the near future, we anticipate the pace of activity to remain brisk as well,” he says.
This is the Michigan buyer’s first purchases in the state of Alabama, Adams says. The company plans light upgrades at Brookstone.
“They want to manage the properties well, in order to build a good reputation in Alabama and thereby ensure additional growth is possible,” Adams says.