VOL. 111 | NO. 43 | Tuesday, March 4, 1997
lj 10/5 cates
Collierville apartments sold for $11 million
By LAURIE JOHNSON
The Daily News
A California corporation has purchased a Collierville apartment complex for $11 million its first property to acquire in the Memphis multifamily market.
Leading Edge Properties, a real estate investment firm based near San Francisco, bought the Orchards of Collierville at 400 Orchard Circle last week for $49,327 per unit from Evepco Joint Venture, a partnership composed of investors from Memphis and Washington D.C.
Steve Woodyard of RFS Realty LLC, brokered the transaction.
Although the 226-unit apartment complex, located between Bray Station Road and Byhalia Road across from the entrance to Schilling Farms, was never officially on the market, its former owners agreed to consider an offer from Leading Edge, Woodyard said.
Colliervilles status as one of the most rapidly developing areas of the country was one of the things that caught the attention of the new investment group.
"The explosive growth that Collierville is experiencing now and will continue to experience in the future contributed to the propertys appeal as a good investment," Woodyard said.
At the time of closing, The Orchards were 95 percent occupied. The unit mix consists of 56 one-bedroom, one-bath units; 130 two-bedroom, two-bath units; and 40 three-bedroom, two-bath apartments.
Rental rates range from $580 to $595 per month for a one-bedroom unit to $755 to $770 per month for a three-bedroom.
Each apartment features a fully equipped kitchen, washer and dryer and large verandah with triple French doors. Amenities of the complex include a swimming pool, exercise facility, tennis courts and pond.
No renovations are planned for the property, which was built in 1991, except minor cosmetic improvements, such as painting both the interior and exterior of the buildings. The parking lot also will be improved.
LEDIC Management Group will continue to manage the property for the new owner.
Woodyard said that, as a broker, he sees a great deal of interest from institutional-type investors, including pension fund management companies and real estate investment trusts, in acquiring properties in the Memphis multifamily market.
"These types of investors keep a balanced portfolio of real estate holdings so that if one sector experiences a decline, it is generally stabilized by another sector," he said.
"Multifamily properties, overall, are considered less risky, because, for instance, a vacancy of one apartment makes less of an impact than a vacancy of a 20,000-square-foot space in an office building."
Presently, the Orchards of Collierville and another property called Dogwood Creek at Almadale Farm, a 278-unit property located off Houston Levee Road and Dogwood Road, are the only post-1990s multi-family properties located in Collierville, said Steve Rudesill, vice president of SPL Corp., an apartment brokerage and market research company in the multi-family industry. LEDIC Management Group is the property management affiliate of SPL.
Dogwood Creek is being developed by Patton & Taylor.
The next largest property in the Collierville market is a 1970s vintage property called Collier Village with 100 units.
As for new development, Schilling Farms has land zoned multi-family that could be developed into more than 1,700 units, Rudesill said.
"Theres the potential for quite a bit of additional apartment supply in Collierville," he said. "I would anticipate that we could see two developments begin in late 1997 or early 1998, and the reason for that time frame is that the infrastructure for Winchester Road and Nonconnah Parkway will not get out until Schilling Farms until then."