An Atlanta apartment investor is expanding its portfolio in a western metropolitan area that has experienced the largest percentage increase in home prices over the past year.
Cortland bought The Addison, a 237-unit apartment building opened last year in Boise, Idaho, from Salt Lake City-based Gardner Co., the Atlanta firm announced.
Gardner developed the property on a ground lease with the Harry W. Morrison Foundation, a longtime family philanthropic nonprofit group. Morrison was one-half the namesake of Morrison Knudsen, the civil engineering firm that built major landmark U.S. projects such as the Hoover Dam, the San Francisco-Oakland Bay Bridge and the NASA Kennedy Space Flight Center in Florida.
Cortland bought the apartment buildings, while the foundation retained ownership of the land and has a ground lease with Cortland. “Families don’t sell land” so the generational wealth can continue, said David Wali, vice president at Gardner.
Wali said he got the idea for The Addison, where the units wrap around a parking garage, during a visit to Nashville, Tennessee’s The Gulch, a two-decades-old redevelopment at the western edge of the city’s downtown.
The Addison deal follows Cortland buying the 386-unit Franklin at Ten Mile in Meridian, a neighboring suburb in Boise, a month ago and Cortland South Meridian, a 336-unit apartment property, last December. Prices for each weren’t disclosed. Idaho is one of 10 states that doesn’t require disclosure on deed transfers.
“The addition of these communities to the Cortland family allows us to operate at scale in the market and offer unmatched service to our residents,” Mike Altman, Cortland’s chief investment officer, said in a statement.
Cortland's deals have taken the firm, which is invested in or manages more than 250 apartment properties around the country, into the hottest housing market in the country. Home prices there have rocketed up during the pandemic as people left high-priced areas such as California and could work remotely.
A study by Florida Atlantic University and Florida International listed Boise’s housing market as the most overvalued in the country. According to the study, Boise’s pricing history suggests that the average house prices should be $299,202 now, but the typical buyer is paying $516,548, 72.64% higher than the pricing trend.
Brad Dillman, Cortland’s chief economist, said in an email through a spokeswoman that the rising home prices reflect growth and growing markets need “multifamily housing, even in a place like Boise, where in-migration consists in large part of people migrating to afford owned housing.”
Apartment rents in the Boise area have risen at a slower place than housing prices. CoStar’s Boise market report said rent growth year over year in the second quarter is 7.3%, which is below the national average of about 9.7%.