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VOL. 125 | NO. 57 | Wednesday, March 24, 2010

Philadelphia-Based Investor Buys Waterstone Landing Apartments

By Eric Smith

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The Memphis multifamily market remains attractive to Resource Real Estate Inc., which has bought its second apartment complex here.

Five months after making its initial Memphis acquisition, the Philadelphia-based real estate investment company paid $5.7 million for the 378-unit Waterstone Landing Apartments at 5995 Waterstone Oak Way in Hickory Hill.

Operating in the transaction as RRE Waterstone Holdings LLC, the company bought the complex in a March 16 special warranty deed from Hickory Gardens Associates LLC, an affiliate of Norfolk, Va.-based Harbor Group International.

RRE financed the purchase with an $8.2 million loan through Varde Investment Partners LP. Alan Feldman, CEO of Resource Real Estate, signed the trust deed on behalf of RCP Waterstone Manager LLC, the managing entity of RRE Waterstone Holdings.

A message left with Real Estate Resource for comment on the purchase wasn’t immediately returned.

On the west side of Ridgeway Road south of Knight Arnold Road, Waterstone Landing has an occupancy rate of 58 percent. It features nine unit types that average 948 square feet and $635 per month.

Built in 1972, Waterstone Landing is split into two parcels, whose addresses are listed by the Shelby County Assessor of Property as 9 and 3417 Ridgeway Road.

The first parcel, 9 Ridgeway Road, contains 202 units and 193,389 square feet on 18.73 acres. Its appraised value is $3.9 million.

The second parcel, 3417 Ridgeway Road, contains 176 units and 167,600 square feet on 17.66 acres. Its appraised value is $3.4 million.

Harbor Group International (operating as Hickory Gardens Associates LLC) bought the complex for $11.7 million in 2001, changing the name from Hickory Ridge Apartments to Waterstone Landing.

Blake Pera and Tommy Bronson III of CB Richard Ellis Memphis’ multifamily division represented Harbor Group International in the sale.

Pera worked with the lender/seller in Resource Real Estate’s first high-dollar multifamily purchase last October. The company paid $9.5 million for the Wyndridge Apartments at the corner of Knight Arnold and Ridgeway roads in Hickory Hill.

That complex was an REO (real estate owned) property sold by the original lender following an unsuccessful foreclosure auction. Waterstone Landing also was a distressed sale, but it was privately owned and not bank owned like Wyndridge.

Pera said this new deal was a good fit for Resource Real Estate as it continues to build a solid Memphis portfolio.

“It will be exciting to watch the purchaser renovate and stabilize this asset,” Pera said. “This property complements the other property they own in the market, and the two properties can successfully market off of each other.”

Pera said demand for multifamily properties here is mounting as the market improves. Resource Real Estate’s latest deal is further evidence that it maintains a bullish outlook on Memphis.

“We’re seeing more and more interest coming into the market,” Pera said. “This property made a lot of sense for Resource to take down. It’s going to fit well with what they’re trying to do in the market.”

Real Estate Resource owns six properties in Little Rock, Ark., and one in Knoxville. It has an “ownership interest in and manages a real estate portfolio with an aggregate value of approximately $1.7 billion, which includes 17,000 apartment units and 1.2 million square feet of office, retail, industrial and hotel space located throughout the United States,” according to its Web site.

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