November 21, 2017
CRC Acquires Millworks, 345-unit Apartment Community in Downtown Atlanta
CRC has acquired Millworks, a 345-unit apartment community located at 1888 Emery Street in the Buckhead section of downtown Atlanta for $80 million. The five-building asset was acquired from the developer, Pollack Shores, who was represented by Derrick Bloom, David Gutting and Brandon Beaty of JLL. This represents the first acquisition completed by CRC in the greater Atlanta marketplace, and the second from Pollack Shores, an Atlanta-based developer.
Contained within a five-acre site directly adjacent to Interstates 75 and 85, Millworks was acquired on behalf of Continental Realty Fund IV, L.P., a $164 million fund focused on the acquisition of value-add retail and multifamily properties situated throughout the Mid-Atlantic and Southeast regions of the United States. This is the sixth residential community and eleventh overall asset purchased by the Fund since its inception.
“Millworks represents a best-in-class asset located within the Upper Westside of Atlanta, which offers premium access to the city’s key employment hubs, as well as a robust urban living and entertainment environment,” stated J.M. Schapiro, Chief Executive Officer of Continental Realty Corporation. “The property was acquired substantially below replacement costs and has accomplished among the most compelling lease-ups in the market with an average of more than thirty leases executed monthly since February. This exceptional velocity was achieved while offering the lowest concessions in the submarket.
“With the Buckhead area supported by upscale restaurants, gourmet markets, boutique retailers, art galleries and live music venues, Millworks is positioned in the virtual epicenter of activity in the downtown marketplace. Its mix of one bedroom to three bedroom floorplans with flexible designs responds to the living needs of every demographic group, ranging from young professionals to empty-nesters. This project provides our company a strong foothold into the greater Atlanta metropolitan area that experienced the second highest growth rate in the country, with more than 80,000 new residents entering the region within the past year,” he added.
Delivered earlier this year, Millworks contains 531 parking spaces for residents and offers one, two and three bedroom floorplans ranging from 647 to 1,470 square feet of space featuring open space designs with balconies and porches on each unit. Standard features include quartz countertops, stainless steel appliances, nine-foot ceilings with fans and vinyl wood plank flooring. Additional amenities include expansive walk-in closets, bathroom tile to ceiling and stand-up showers with frameless doors.
“As we continue to monitor the top Atlanta submarkets, we have seen market conditions improving for a tactical pre-stabilized new vintage apartment investment strategy,” stated Ari Abramson, Vice President of Acquisitions for Continental Realty. “The Fund was able to acquire Millworks at an attractive price per unit and position the property to achieve outsized yield on a risk adjusted basis. Overall, the investment is expected to offer significant upside in rents and operating incomes in the initial years of operation. Millwork’s superior location, top-of-market finishes and visibility along I-75 solidifies a perennial leg-up on its competition.”
The community amenity package includes a saltwater pool with outdoor lounge area, accented by dual-faced gas fireplaces, a fire table and grilling station and a sun shelf. The resident clubhouse contains a fully-appointed kitchen, bar lounge, art studio area and multi-purpose athletic club with cardio equipment and yoga space. Additional amenities include an onsite dog park and Internet café with Wi-Fi connectivity.
The average household income contained within a one-mile radius of Millworks is approximately $112,000 with an average home value exceeding $455.000. The media age in the immediate area is thirty-two. Nearby Georgia Institute of Technology (Georgia Tech) has more than 26,000 full-time students and 5,000 faculty members.
The Buckhead section of Atlanta contains more than 18 million square feet of commercial office space and more than 14 million square feet of complementary retail space that services the approximate 100,000 employees working in the immediate area. Announced expansions and relocations are expected to add more than 12,000 jobs to the region over the next two years. Located within close proximity to Millworks are Piedmont Hospital and Shepherd Center, two healthcare communities that combine for more than 4,000 healthcare professionals and 1,000 physicians.
“We consider this a one-of-kind, landmark acquisition in the Atlanta market with effective rents increasing by approximately 8% since March,” Shapiro added. “Millworks is benefitted by a highly-visible location featuring a drive-by audience of more than 300,000 vehicles daily, and a site surrounded by significant employers, local technology start-up companies and healthcare facilities. Millworks is ideally located in Buckhead along Howell Mill Road and adjacent to West Midtown and Collier Village providing access to in-town jobs and major thoroughfares. The property significantly benefits from the Buckhead demographic.
“Given its recent delivery, the project does not require the investment of resources for capital improvements. As a result, the Fund should benefit from higher cash flow growth with a limited allocation to capital expenditures. Millworks fulfills each important acquisition criteria asset quality, demographics and the opportunity for value creation,” Shapiro concluded.
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March 19, 2018