Two Waters Capital Enters Tennessee Market

The company purchased its first two properties in Chattanooga with more than $31 million in loans.
Evergreen at Hickory Valley

Two Waters Capital has entered the Tennessee market after buying two apartment communities with the help of more than $31 million in Freddie Mac loans from Capital One.

The two 10-year fixed-rate loans will have four years of interest-only payments that will be followed by amortization on a 30-year schedule. Capital One’s Vincent Punzi, vice president of the company’s Multifamily Finance, originated the transaction. Aline Capital’s Scott Williams, managing director, was the broker that arranged the financing. 

READ ALSO: Capital One Closes Freddie Mac Loan for Chicago Property

Two Waters secured a $13.9 million loan for Evergreen at Hickory Valley at 1507 Hickory Valley Road in Chattanooga, Tenn. The apartment community was built in 1974 and later upgraded in 2012 and now offers 200 units spread through one-, two- and three-bedroom units. According to Yardi Matrix data, the property has a 94 percent occupancy rate with an average rent of $888.

Punzi explained that the transaction was complicated by a fire at Evergreen that damaged 10 units. While the incident was problematic, Capital One was still able to provide the loan with a lower spread and higher proceeds than originally anticipated, Punzi said. Two Waters is also participating in Freddie Mac’s Green Advantage program, where they committed to certain energy or water use reductions to get better pricing and funding.

The Meridian at Hamilton Place, located at 7301 E. Brainerd Road, was a more straightforward deal where Two Waters received a $17.3 million loan. The 238-unit property was built in phases between 1978 and 1994 and later renovated in 2012. The Meridian offers one-, two- and three-bedroom units. The property has a more than 97 percent occupancy rate with an average rent of $967, according to Yardi Matrix data.

Both properties have a host of amenities including a fitness center, a clubhouse, a saltwater pool, business center, and dog park. However, Two Waters will also be upgrading the properties as part of their value-add strategy that includes renovations to the unit’s interiors and exteriors, the community amenities and the property’s landscaping.