CHARLOTTE, NC-Summit Hill Apartments, a 411-unit residential complex here was acquired for $33 million recently by a joint venture of New York-based Sterling American Property Inc. and Westdale Asset Management. The acquisition is Sterling's first significant acquisition in North Carolina.
The property was built in two phases in the first half of the 1990s. It sits on 33.8 acres at 6123 Farrington Rd. Common amenities include tennis courts, swimming pools, a playground, a fitness center, a sand volleyball court, two laundry facilities and 46 detached parking garages. Physical occupancy is 94%.
Sterling officials say the capital improvement plan for the property includes resurfacing the tennis courts, seal coating and re-striping the parking lots, painting the building exteriors, new pool furniture and additional landscaping. Sterling American will also rename the apartment complex to Farrington Lake, which is the name of a lake located on the property.
Sterling's VP of acquisitions Mel Mayers says the price paid is "well below" replacement cost. In addition, he says the neighborhood "shows tremendous upside potential."
The price paid equates to about $80,300 per unit, while replacement cost it upwards of $100,000 per unit. As for the upside potential, Mayers says the Raleigh, Durham, Chapel Hill markets were hit hard in recent years and economic occupancy has been very poor. Now, he says, there is not a lot of new construction occurring and concessions are already starting to be cut back at Summit Hill and other properties.
"We see upward momentum for rents and occupancy," says Mayers.
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