August 26, 2016
Atlanta—Real estate investment group PointOne Holdings, headquartered in Hollywood, Fla. and Atlanta, Ga., has purchased the 334-unit, garden-style Crestmark Apartments in the Metro Atlanta city of Lithia Springs, Ga. for just more than $29 million.
Built in two phases in 1993 and 1997, Crestmark Apartments is 97 percent occupied. The community is located just minutes from downtown Atlanta, Hartsfield-Jackson International Airport and a number of Atlanta area employment centers. More than 60,000 vehicles drive by Crestmark Apartments along Thornton Road on a daily basis.
Two pools, a resort-style clubhouse and business center, state-of-the-art fitness center, outdoor kitchens, sports court, children’s playhouse and walking trail highlight the common-area amenities for residents.
Averaging a roomy 1,079 square feet in size, Crestmark Apartments residences offer fully-equipped kitchens, ceiling fans, garden tubs, laundry/utility room with washer/dryer connections, patio/balcony, bay windows and walk-in closets.
The Crestmark Apartments deal checks several of its acquirer’s key boxes.
“The property is in a B submarket of Atlanta with a strong set of employers in close proximity to the property. (It’s) a submarket we know and understand very well,” PointOne Holdings managing member Ben Colonomos told MHN. “The seller did an amazing job cleaning it up and building a very strong amenity package which elevated the quality of the property. The seller renovated a few units but left most of that work to us. And so we see a great opportunity to improve units and increase rents. There is a strong value-add component which is harder to find in today’s market. There are no new starts in Douglas County, mostly due to the county’s strict density laws.”
PointOne Holdings aims to invest $1.4 million in capital improvements as it renovates about 40 percent of the property with an eye to rent growth, Colnomos said. “We believe that we acquired Crestmark at safe per-unit basis and see this as a solid five-to-seven-year hold generating strong cash for our investors during that period,” he added.
PointOne Holdings owns Waterford Point across Thornton Road. That property “has been outperforming our forecasts for the last two years,” Colonomos reported.
“Crestmark is a better-quality, newer property with larger units and better amenities, yet it is not getting the rents that Waterford Point does. We underwrote Crestmark very conservatively, using the rent increases that Waterford has been getting, so we feel good about that.” he added. “PointOne Holdings assumed an existing Freddie Mac loan at a low rate and contemporaneously obtained a supplemental loan from Freddie Mac to complete the acquisition. The total debt to close the transaction was $22.6 million, which makes the deal work from day one.”
Concluded David Lewin, managing member of PointOne Holdings: “Crestmark Apartments is what the market is looking for: Easy access, great amenities, large units and a solid resident base as neighbors.”
Crestmark Apartments is the fourth major multifamily or commercial acquisition for PointOne Holdings this year.
Photo courtesy of Crestmark Apartments