Baltimore, MD – A joint venture owned by Alex. Brown Realty (ABR) and Global Asset Alternatives (GAA), an Atlanta-based real estate investment company, has acquired the Village at Rice Hope Apartments in Savannah, Georgia. ABR Chesapeake Fund IV, a value-added real estate fund sponsored by ABR, invested $3.6 million in the venture.
The Village at Rice Hope is a Class A multi-family apartment community that includes 200 units in two, four-story elevator-serviced buildings. The property is part of the master-planned Rice Hope community and is located northwest of the Savannah metropolitan area, in the Port Wentworth submarket.
The property was originally planned to include 500 units constructed over two phases. The first two buildings of Phase I were completed in 2008, but market conditions no longer supported the original projected rental income. The lender subsequently placed the loan in default, enabling the joint venture to acquire the property via a short-sale at a 32% discount to the unpaid principal balance on the original construction loan.
“We are in the fortunate position to capitalize on this property’s distress,” stated Dennis Pemberton, managing partner with GAA. “Despite the financial difficulties of the seller, this is an institutional quality asset that is currently 93% occupied.” Pemberton further noted that the property’s location in the “path of growth” for the Savannah MSA should ensure continued demand for apartment units
As part of its business plan, the joint venture plans to invest $400,000 of capital to top-coat the asphalt on the parking lot, update the landscaping, install a new entrance sign, and purchase new fitness equipment for the clubhouse.
The acquisition includes the purchase of additional developable land entitled for 320 apartment units. “Our underwriting did not assign value to the land, but we could see additional upside either through the development or sale of this land,” noted Tom Burton, ABR’s CIO.
Alex. Brown Realty (ABR) is a privately owned real estate investment manager organized in 1972 and headquartered in Baltimore, Maryland. ABR co-invests with joint venture partners in a broad spectrum of property types located throughout the United States. www.abrealty.com
Global Asset Alternatives (GAA) is a private real estate investment and advisory firm. Headquartered in Atlanta, Georgia the firm’s primary activities are the acquisition, development, and operation of high quality real estate assets in the southern United States. GAA currently controls over $175 million of real estate assets and has participated in over $1.5 billion of transactions. www.gaa-llc.com