VOL. 111 | NO. 208 | Wednesday, November 5, 1997
By CAMILLE H
Dallas company buys
By CAMILLE H. GAMBLE
The Daily News
Cameron at Kirby, a 324-unit apartment complex at 3094 Autumnwood Ave. in Southeast Memphis, and Stonegate, a 208-unit apartment complex at 4500 Stonegate Drive in Raleigh/Bartlett were purchased for $16.65 million by Cornerstone-Cameron and Stonegate Inc., a not-for-profit organization.
The seller is Security Capital Atlantic in Atlanta. Steve Rudesill of Memphis-based SPL Corp. represented the parties in the transaction.
Security Capital Atlantic acquired Cameron at Kirby Parkway in February 1994 and Stonegate in October 1994 in transactions handled by SPL Corp.
Ledic Management Group will manage the properties for Cornerstone.
Tax-exempt bonds totaling $21.9 million provided financing.
An "A" rating from Standard and Poors was received for $18.8 million of the total bond issue with the $3.1 million balance of the financing in unrated subordinate bonds.
Cornerstone-Cameron and Stonegate Inc. is an affiliate of Cornerstone Housing Corp., a Tennessee non-profit corporation.
CHC was launched in 1991 by the Enterprise Foundation as a non-profit entity with a mission to acquire a portfolio of multifamily properties.
CHC buys properties from government and private owners. It then rehabilitates the properties, if necessary, and rents apartments to low-income families.
Both properties are in good condition, and only minimal improvements are anticipated, according to Cornerstone Housing.
Morgan Keegan served as co-senior manager with Wheat First Butcher Singer to place tax-exempt bonds. Archie Willis of Morgan Keegan served as lead banker for the transaction.
Cameron at Kirby was built in 1985. The property has 144 one-bedroom, one-bath units with approximately 700 square feet; 48 two-bedroom, one-bath units with approximately 875 square feet; and 132 two-bedroom, two-bath units with approximately 990 square feet. One-bedroom units rent for $495, and two-bedroom units rent for $569 and $589.
Stonegate was built in 1985. The property has 172 one-bedroom, one-bath units with approximately 750 square feet; 112 two-bedroom, two-bath units with approximately 950 square feet; and 24 three-bedroom, two-bath units with approximately 1,040 square feet. Current rents are $65, $560, and $654, respectively, for one-, two- and three-bedroom units.
Twenty-five percent of the units at each property will be rented to residents making less than 50 percent of the areas median income, and 50 percent of the units at each property will be rented to residents at or below 80 percent of the areas median income level. The remaining 25 percent of the units in each property are unrestricted.
Security Capital Atlantic reported in a third-quarter report that the real estate investment trust continues to research new markets that will provide opportunities for strong growth.
In October, Atlantic expanded its operations into two new target markets where it intends to build a presence.
The company made its first land acquisition in Indianapolis for the planned development of 202 units. In addition, Atlantic acquired a community in Columbus, Ohio, representing 288 units and an investment of $14.9 million.
"Indianapolis and Columbus are just two of the new markets we have been researching over the past year," said James C. Potts, co-chairman and chief investment officer.
"The attractive supply and demand characteristics of these near-Midwest cities are an excellent example of emerging markets where, when combined with our operating system, we expect to produce significant long-term growth."
Though development remains its primary focus, Atlantic will continue to acquire existing multifamily communities.
During the third quarter, the company bought two properties in Raleigh, N.C., and Nashville, totaling 392 units and representing a total investment of $17.7 million.
In October, the company acquired a 168-unit community in the Tampa area for $7.5 million.