In what amounts to one of the largest sales of Baton Rouge commercial property in recent history, a Dallas-based firm has purchased The Standard apartment complex at 740 W. Chimes St. for nearly $108.6 million.
University House Communities, which specializes in developing, acquiring and managing student housing communities across the country, purchased the 287-unit complex—which opened in August—from Athens, Georgia-based Landmark Properties. A 5.5-acre tract for the complex was originally purchased by Landmark in December 2013 for $9.84 million, and the firm spent roughly $50.6 million to develop the property, according to permits filed during construction.
The LSU-area complex will be rebranded as University House Baton Rouge.
Wesley Moore, a commercial real estate appraiser with Cook, Moore and Associates, says the sale—at roughly $378,386 per unit—sets a new high water mark for the Baton Rouge market.
“$378,000 per unit is so far off the charts,” he says. “$338,000 is the highest I have recorded in my national database, and that was in Arizona.”
For local comparison, when the 158-unit University Edge apartment complex on McKinley Street was sold in January for $32.5 million, the sales-per-unit price worked out to roughly $205,696.
Until now, Moore says, the high water mark for apartment sales in Baton Rouge was set in September 2011 when The Cottages, a 382-unit apartment complex at 777 Ben Hur Road, sold for roughly $234,000 per unit.
“I don’t know if it says anything about this market at all,” Moore says of University Home Communities’ purchase. “Anomalous is very much the term that comes to mind.”
The sellers appear to have gotten a very good return on their investment, Moore says.
“Developers are usually happy to get 18% to 20%,” he says. “If they started with $60 million and got $108 million, that’s an 80% return. I’ve never seen numbers of that proportion before.”
Troy Manson, executive vice president and chief investment officer for University House Communities, wouldn’t comment on the purchase price this morning but says the company has been looking to enter the Baton Rouge market for the past few years.
“What we do is focus on purpose-built Class A student housing that is within walking distance to tier one universities across the country. The LSU market is obviously an attractive market and one that we’ve been trying to get into for some time and we’re very happy to be here,” Manson says, adding current occupancy in the complex is “in the mid-90s.”
The complex measures more than 750,000 square feet in total, including a 12,000-square-foot clubhouse and amenities such as a game room, rooftop pool, golf simulator, computer center and study rooms. The property also has outdoor grilling and fire pits as well as garage parking.
—Steve Sanoski
