Tarragon Pays Premium for Gables North Village

In acquiring the property at 300 Grand Magnolia Ave., Tarragon South, an affiliate of New York-based Tarragon Corp., adds a 96%-leased asset to its portfolio. The property was never on the market. "We have done other deals with Gables and that is how we found this one," Tony Martin, vice president of 30-year-old Tarragon South, tells GlobeSt.com.

The deal took three months to complete, from contract signing to closing. "The deal was done at this time because we wanted another property in Celebration and Gables presented it to us," Martin says. Gables developed the property in 2002. The new owner of record is North Village Tarragon LLC, the property tax filing name for the asset.

The average asking rent range is $850 per month for a one-bedroom, one-bath flat to $1,600-plus for a four-bedroom, three-bath unit. Two-bedroom-two bath townhomes start at $1,500 per month; three bedroom-two-bath homes start at $1,800.

For Gables Residential, the REIT expects to record a gain, net of associated costs, of about $8 million, or 24 cents per diluted share, in the first quarter, says company chairman and CEO Chris Wheeler. However, the net cash proceeds from the sale, less the cash invested in the sold asset, is expected to be about $2.3 million or seven cents per diluted share.

"We continued to execute our strategic plan by recycling capital from the sale of assets in non-core markets into our targeted established premium neighborhood locations," Wheeler says.

The NAREIT apartment sector index shows Gables Residential ended 2004 by giving shareholders a 10.67% total return and a dividend yield of 6.73%. The best performing REIT last year in the apartment sector was Atlanta-based Roberts Realty Investors Inc. with a total return of 101.17.