Multifamily Management Inc., a Mobile, Alabama real estate company, has purchased two apartment complexes from Provident Resources Group, a nonprofit organization that develops and operates health care, senior living and multifamily housing developments.
In a deal that closed earlier this week, MMI acquired the 184-unit Goodwood Place Apartments at 356 Apartment Court Dr. and the 96-unit Towne Oaks Apartment Homes at 1331 N. Sherwood Forest Blvd. for $9.5 million.
Chris Gremillion of NAI/Latter & Blum brokered the deal.
Both complexes include a mix of market rate and affordable housing units. Both are averaging near 100% occupancy since the August flood. MMI CEO Pat Coffey says his firm plans to make some modest investments updating and renovating the properties.
The acquisition will grow MMI’s footprint in the Louisiana market. The company owns or manages dozens of multifamily complexes in the state, including two in Baton Rouge—Edgewood Apartments and Teakwood Village.
Coffey says the firm is interested in expanding its local presence, sees a lot of potential in the local market and felt the complexes were offered at a fair price.
“We think the Mid City submarket, in particular, looks promising and has a good story,” Coffey says. “We’ve been in the Baton Rouge market 30 years, so we were pretty familiar with it. We look forward to running them and being very successful.”
For Provident Resources Group, the sale was bittersweet. The company, which acquired the complexes in 2009, is taking a $400,000 hit on the deal. Provident Resources CEO Steve Hicks says his company bought the properties seven years ago at the request of Our Lady of Mercy School, which was concerned about the conditions of the Goodwood complex at the time and the lack of upkeep by the absentee landlord, who owned both properties.
Provident Resources paid $9.9 million for the complexes and, over the years, improved the tenant mix.
“Our goal had been to reduce the debt down to a point where the church could acquire the (Goodwood) property or we could donate it to the church if we could continue to operate it and pay off the debt,” he says. “But that was not the case. Our financing with Fannie Mae matured and we could not get refinancing so we had to sell. … It’s one of the challenges of being a nonprofit development company.”
Provident didn’t list the complexes on the market but rather shopped them around to a select group in order to find the right buyer, Hicks says.
“We wanted to make sure we found a good neighbor for Mercy,” he says.
—Stephanie Riegel
