Chattanooga's biggest homebuilder says he is also bullish on the local apartment market, even after the addition of thousands of rental units over the past five years.
James "Win" Pratt, president of Pratt and Associates, said the company acquired the 48-unit Magnolia Apartments in Hixson last week for nearly $3.7 million when the opportunity came to buy the complex. Built in 1986, the Magnolia complex at 5225 Old Hixson Pike is adjacent to the 30-unit Oak Wood Estates, which Pratt built last year.
"We had no trouble leasing up Oakwood within three months so we know this is a strong market area and it was a good chance to acquire a property adjacent to that development," Pratt said Tuesday. "We plan to remodel the exterior of the three buildings (in the Magnolia Apartments) and upgrade the interiors to be more in line with Oakwood Estates."
Pratt said the company expanded into the rental market a few years ago and now owns about 225 apartment units in the Chattanooga area.
The purchase price paid by Pratt for the Magnolia Apartments is nearly $1.3 million more than the $2.4 million the former owners, Magnolia Apartment LLC, paid for the property in 2013.
"There are a lot of downtown apartments, but we're not in that part of the market and we're still seeing strong and consistent demand for both purchased and rental housing in the current market," Pratt said.
Callio Properties, a Chattanooga-based management firm which also manages Oakwood Estates, is now managing the Magnolia Apartments.
The sale of the Magnolia is the latest among more than $400 million of multi-family real estate properties sold in Chattanooga since the start of 2016.
Despite an influx of more than $1.2 billion of new rental properties in Chattanooga' in the past three years, rental rates for apartments in Chattanooga continue to rise, according to a recent study by the online apartment rental service Zumper.com.
Contact Dave Flessner at dflessner@timesfreepress.com or at 757-6340.