Passco Companies has acquired The Overlook multifamily community in Nashville, Tenn., for $51.4 million.
The 452-unit apartment community features units with large open-plan floor plans of up to 1,250-plus square feet in size. Highly-sought amenities include a high-end fitness center, two pools with cabanas and meticulously landscaped grounds.
While The Overlook features an array of upsides, such as high occupancy and good maintenance, it hasn’t been updated in nearly 20 years and rents are below market rates. That has convinced Passco to undertake some interior upgrades soon, while at the same time initiating a professional management program.
Longer term, with housing demand in Nashville steadily climbing, The Overlook is expected to provide quality housing for about half the price per square foot of the downtown market, which bodes well for future value increases.
In 2014, Passco acquired Cambridge at Hickory Hollow, a neighboring multifamily community in the same neighborhood, and at that property has driven value through similar upgrade programs. It acquired The Overlook based on its experience in Nashville and its expectations of continued submarket growth.
The Overlook is located within bike-riding distance of employment and shopping. An additional 1,600 healthcare jobs will be created with the arrival of a new Community Health Systems office campus anticipated next year.
The apartment community is also a mere 15-minute drive to Vanderbilt University and Medical Center, as well as Nashville’s downtown core. There, almost three million square feet of new office space is in the development pipeline.
“Nashville’s rapid growth is no longer news to anyone,” said Colin Gillis, vice president of acquisitions, Southeast, for Passco Companies. “We were seeking another opportunity in the market, as it perfectly matches our continued strategy of identifying and acquiring value-add and core assets in growing markets throughout the country that are positioned to perform well over time.
“In fact, we are now pursuing additional multifamily opportunities here.”
CBRE Senior Vice President Russ Oldham represented both the buyer Passco and the seller Olympus Properties. Chris Black of KeyBank Real Estate Capital’s Commercial Mortgage Group arranged acquisition financing for Passco Companies through Fannie Mae.
This article was originally published on Multi-Housing News.