When the team at Continental Realty Corp. first toured the Sycamore at Tyvola in Charlotte, North Carolina, they knew it was the property they wanted to buy.
“You drove in and knew that you wanted to own this property for the long term,” Ari Abramson, CRC’s vice president of acquisitions, told Multifamily Dive.
Part of the appeal comes from Sycamore at Tyvola’s density. The property has nine units per acre, making it 70% less dense than most of its competitors, according to CRC. Its design was also a factor.
“It's a very unique octagon-shaped structure,” Abramson said. “It's a four-story elevator service building with enclosed corridors. That octagon design provides more corner units. So there's more direct sunlight and more windows.”
The property, developed by Switzenbaum & Associates and delivered in December 2018, was 95.5% leased at the time of the transaction. It consists of one- and two-bedroom units, with average sizes of 1,042 square feet.
Sycamore at Tyvola’s amenities include a large resident clubhouse, a 24/7 fitness center, an event space, a spin studio, a yoga and barre room, a conference room, a business center and secure digital package-acceptance lockers. The outdoor amenities include a swimming pool with sun shelf, poolside lounge, tennis court, putting green, BBQ area, grilling pavilion, fire pit, dog park and wooded walking trails.
The property sits in “a path of growth location” south of the Uptown submarket in Charlotte, which also appealed to CRC, according to Abramson. “Charlotte is seeing a rise of employment and population from migration and has a stable employment base,” he said.
Though the CRC team coveted the 288-unit property, it took more than six months to close the deal for $96.3 million. The company assumed the in-place 40-year amortizing fixed-rate HUD loan at a 2.96% interest rate with a mortgage insurance premium.
Going through the burdensome HUD process is never easy, but the payoff was worth it for CRC, which owns and manages 1,600 apartment units in eight properties throughout North Carolina.
“This loan was under market when we agreed to assume it,” Abramson said. “As rates moved up unexpectedly, it became 300 basis points below current fixed long-term interest rates, which made the loan even more attractive.”
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