Cordova Apartment Community Sells for $27.9M
Published on: August 4, 2017
Patrick Lantrip, Memphis Daily News
The Charleston, a 284-unit apartment community on the east side of Houston Levee Road just south of U.S. 64, has sold for $27.9 million, marking a new chapter for a property that was built just last year.
In the transaction, Provo, Utah-based Peak Capital Partners, doing business as PC Charleston LLC, purchased the 24-acre parcel from local developer Wesscorp Communities, doing business as Charleston HL Apartment Community LLC. Charles W. Misenhelter, signed the deed on behalf of the sellers.
The 379,731-square-foot complex, located at 2851 N. Houston Levee Road, was appraised at $23.1 million this year, according the Shelby County Assessor of Property.
An official with Wesscorp declined to comment on the sale, and multiple calls to Peak Capital were unreturned by press time.
In conjunction with the purchase, Jeff Danley, Peak Capital’s founder and managing partner, took out a $22.1 million mortgage with KeyBank on behalf of PC Charleston.
Wesscorp began The Charleston project in 2014 when the company purchased the vacant 24-acre parcel for $1.3 million. A year later, the company obtained $30 million in construction financing from the Memphis office of Financial Federal Bank.
“The Highway 64 corridor is an active submarket with growing commercial and residential development,” said Misenhelter told The Daily News at the time.
The complex was designed to house 12 units per acre. One-bedroom units average more than 900 square feet, while two- and three-bedroom units average almost 1,200 square feet.
Construction on the project wrapped up in November.
Brianna Mann and Rose Ann Houge of Peak Management Group, have been tasked to handle the leasing. After five months of leasing activity, occupancy is already up to 60 percent, according to Wesscorp’s website.
The Charleston’s sale is the final piece in Peak Capital’s acquisition of five Wesscorp apartment communities in Memphis. The deal, which was announced in February 2016, totaled 1,316 units.
The other four properties – The Orleans at Walnut Grove, Grahamwood Place Apartments and Pinebrook Pointe Apartments in Memphis, along with Angelo’s Grove in Marion, Arkansas – were existing communities whose sale closed within a few months of the announcement. But because construction The Charleston had not been completed, the sale was delayed until now.
Peak’s acquisition of the Wesscorp portfolio marked the company’s entrance into the area.
“These acquisitions are a first for Peak in the Memphis market,” Peak Capital founder and managing partner Jamie Dunn said in the 2016 statement announcing the deal. “We look forward to partnering with Wesscorp Investments on future properties and growing our Memphis portfolio.”
Peak Capital and its affiliates own properties in 10 U.S. markets, according to the company, and its assets include a mix of conventional, affordable and student apartments. Along with the five Memphis-area assets it purchased from Wesscorp, Peak owns five communities in the Nashville area.
The Charleston’s sale is the second-most expensive multifamily transaction so far in 2017, topped only by the $32 million sale of the 252-unit Bridges at Germantown, located at 7455 Wolf River Blvd. west of South Germantown Road. The only other transaction to come close this year was the March sale of the 486-unit Stone Ridge at Germantown Falls, located on the west side of Riverdale Road north of East Raines Road. That community was sold in two parcels for a combined $26.4 million.
The news also comes in the heels of a string of high-profile multifamily projects, primarily located in the center city, including the Overton Gateway, a planned 176-unit complex near the confluence of Sam Cooper Boulevard and East Parkway; a proposed 25-unit building on Cooper Street near Young Avenue; and a massive 286-unit mixed-use development project slated for the former Wonder Bread factory on Monroe.
When coupled with previously completed or announced projects, including Crosstown Concourse and two separate proposed buildings on McLean at the corners of Union Avenue and Madison Avenue that would have more than 100 units each, it paints a picture of a city trying to increase its population and density.
“I really think the mayor’s incentives through EDGE are working, which is evidence by the increased activity,” said James Maclin, a former MAA executive who left the Memphis-based real estate investment trust to start his own venture, M&M Enterprises.
“Customers (for apartments) are telling us that they want to be social, active, engaged, healthy and diverse in all senses of the words,” Maclin said.