Milestone Apartments Real Estate Investment Trust announced that it has entered into an agreement to purchase Park 9, a 275-unit, Class A multifamily apartment community a suburb of Atlanta, Georgia, for a purchase price of US$47.0 million. With an estimated year one capitalization rate of 5.71 per cent, the acquisition is expected to be accretive to the REIT.
Park 9 is located in the Northwest Atlanta suburb of Woodstock on Ridgewalk Parkway, which has immediate access to Interstate Highway 575, a heavily travelled freeway connecting the rapidly growing North Atlanta suburbs to major employment centres. Park 9 is in close proximity to the Outlet Shoppes of Atlanta, a 400,000 square-foot retail development, and downtown Woodstock, which offers restaurants, entertainment options and various community services.
Woodstock was named one of the top 50 places to live in the U.S. in 2015 by Money Magazine and benefits from favourable supply and demand trends with limited new multifamily construction. Over the last 10 years, only three new apartment communities have been developed in Woodstock. Milestone’s Harbor Creek property, located just six miles north of Park 9, has performed well since the REIT acquired the asset in May of 2014, benefiting from the area’s favourable employment, population and demographic trends. Park 9 will mark Milestone’s sixth acquisition in the Atlanta market over the past three years as the REIT continues to service the middle-market renter segment in high growth U.S. sunbelt markets.
Built in 2016, Park 9 is currently 95 per cent occupied with average monthly rents of approximately US $1,200. Park 9’s average in-place rents are higher than the REIT’s portfolio average reflecting a higher percentage of two and three-bedroom apartment units and newly constructed units that offer high-end interior features and amenities. The Park 9 community features spacious living areas, nine-foot ceilings, stainless steel appliances, granite countertops and direct-access garages. Amenities include a clubhouse with a cyber café, a salt water swimming pool with beach entry and resort-style cabanas, an oversized fitness center, an outdoor grilling area, a bocce ball court, a dog park, storage units and electric vehicle charging stations.
Closing and acquisition funding
The acquisition, which is subject to customary closing conditions, is expected to close by October 15, 2016. The REIT will disclose the final details of the purchase, including financing terms, following closing of the acquisition.