CHARLOTTE, NC-Not satisfied with 15 multifamily acquisitions in 2011—and always looking for new markets—Cortland Partners just invested $18.2 million in a duo of Charlotte apartment communities. The acquisitions mark Cortland’s first deals into the Queen City.

In separate transactions, Cortland Partners acquired Cameron at Hickory Grove, and Delta Crossing. Both are garden-style communities located a few miles from Uptown Charlotte and the University of North Carolina-Charlotte and University City. University City is home to the university, a research and technology park, a hospital and more. It is the second-largest employment center in the city behind uptown.

Cortland’s decision to move into Charlotte now came out of its research-driven approach to market selection, Marvin Banks, president and CFO of Cortland, tells GlobeSt.com. Banks says Charlotte demonstrated a supply and demand profile consistent with the characteristic its investment profile demands—a meaningful bias toward future demand for apartments driven by job growth, favorable demographics and controlled supply.  

“The Charlotte economy is supported by a diverse set of companies which have historically exhibited resilience coming out of a downturn,” Banks says. “We think the timing is right to enter Charlotte in order to capitalize on this demand bias for apartments.”

Cameron at Hickory Grove is a 202-unit garden style multifamily apartment complex and was 93% occupied at the close of the second quarter 2011. Due to financial issues with other assets within the portfolio, the owner gave the property back to GE Capital in December of 2010. Cortland snapped it up for $7.54 million.

With the opportunity Cameron at Hickory Grove and Delta Crossing represent, Cortland isn’t finished targeting multifamily in the Charlotte market. “It is important we achieve economies of scale in our operating platform,” Banks says. “We would like to have a minimum presence of approximately 1,500 apartments in the market over the next few years.”

Delta Crossing is a 178-apartment garden style complex. The property is situated on 22.52 acres with an average unit size 896 square feet and was 92% occupied at the end of the second quarter. It is located six miles from Uptown Charlotte and four miles south of University City. Cortland acquired the asset for $7.3 million. With the opportunities, Banks sees challenges.

“Challenges are fairly consistent across most markets at this point in the real estate cycle,” Banks says. “Avoiding areas where new supply may likely occur will be important. Acquiring assets at an attractive cost basis relative to other assets in the submarket is critical—we want to avoid being the highest priced home in the neighborhood, and understanding the economic profile of the residents at a given community will allow us to asses exposure to changes in the job base.”