One of the largest apartment owners in the country closed out 2023 with the top multifamily deal of the year in Charlotte, North Carolina, an acquisition that provides a jolt of optimism at a time when financing headaches and broader economic concerns have stifled multifamily investment activity.
Tennessee's Mid-America Apartment Communities paid $107 million for the 352-unit Alta Filament, one of two multifamily complexes the firm bought in the Sun Belt in late 2023 as it sniffs out discounted prices in the region. The deals, which included an acquisition in Phoenix, closed at 15% below replacement cost, according to the company.
At $107 million, the sale represents the priciest non-portfolio multifamily deal in the Charlotte market last year and comes at a time when rising borrowing costs and stricter lending standards have dampened multifamily valuations across the country. National multifamily investment sales dipped below $100 billion in 2023 for the first time since 2014, according to CoStar data. In Charlotte, the $1.9 billion that traded in 2023 represented a 68% year-over-year decline in transaction volume and was the lowest annual total since 2017.
But despite the ongoing volatility, MAA said it is still betting on the sector with plans to invest an additional $400 million in new acquisitions in 2024.
In recognition of this significant deal, the Alta Filament transaction received a 2024 CoStar Impact Award for sale/acquisition of the year for Charlotte, as judged by real estate professionals familiar with the market.
About the Project: Northmarq conducted over 35 tours of the property that Wood Partners completed last year at 525 E. 21st St. The five-story mid-rise is located in Optimist Park in the city's Mill District, Charlotte’s central arts and nightlife district that gets its name from the mills that used to operate in the area. The building is located near Optimist Hall food hall and the Lynx Blue Line light rail. MAA bought the property in an all-cash deal while it was in lease-up, closing around 80% leased. Following the acquisition, MAA rebranded the property as MAA Optimist Park.
What the Judges Said: Dillard Williams, senior director of leasing at Spectrum Co., highlighted the transaction size and the timing of the deal amid a challenging market. The impact along a growing corridor, said JLL Vice President Spencer Yorke, and the walkability to light rail transit, according to New South Properties senior broker Paula Saunders, were also cited as reasons behind the deal's selection.
They Made it Happen: Allan Lynch, Caylor Mark, Andrea Howard, John Currin, Jeff Glenn, Austin Jackson, Hallie Schellhorn, Sydney Stoever and Phillip Vinh of Northmarq and Carter Siegel of Wood Partners worked on the deal for Wood Partners.
CoStar Market Manager Morgan Markowitz contributed to this report.