Hawthorne at Clairmont, a 269-unit, 2009-built multifamily community, at 2345 Peachwood Cir. NE, was acquired by 37th Parallel Properties Investment Group, according to an announcement Friday. This acquisition is 37th Parallel’s fifth transaction in 2020 and adds to the firm’s growing footprint in the Southeast. The property is undergoing a complete rebrand and has taken the new name of Haven on Peachwood. Community-wide renovations will accompany the new brand. The property was 96 percent occupied at the time of acquisition.
“We are excited to add this high-quality asset to our growing portfolio and continue our strategic expansion in suburban Atlanta,” Dan Chamberlain, managing partner at 37th Parallel, said in a press release. “Suburban, garden-style and mid-rise multifamily has demonstrated material resiliency throughout the Covid-19 spread. We have been able to add several well-placed assets worth over $100 million this year focusing primarily on submarket stability and employment diversity. We look to accelerate this strategy into 2021.”
Haven on Peachwood features a mix of one- and two-bedroom units with floorplans averaging 1,011 square feet. Community amenities include balconies, nine-foot ceilings, a fitness center and cardio studio, a dog park with agility equipment, a saltwater swimming pool, outdoor stainless-steel grilling stations, and a parking deck with covered parking.
“This investment gives us the opportunity to secure a core-plus, institutional-quality asset at an attractive basis, with both revenue and operational upside potential,” Doug Fraser, who leads the acquisition efforts for the firm, said. “The asset is well-located in a high barrier-to-entry submarket that has exhibited persistent demand growth and limited new supply. With only one multifamily asset under construction in the submarket, a mid-rise product with replacement costs well in excess of our asset’s all-in basis, we expect the supply shortfall to put upward pressure on rental rates, helping us to capitalize on our business plan. These favorable supply-demand characteristics have resulted in average rent growth over 6% annually since 2015 and one of the lowest vacancy rates in the metro, further reinforcing our investment thesis.”
This acquisition marks the fourth investment from 37th Parallel’s inaugural fund. 37th Parallel Fund I, launched in November 2019, seeks to acquire value-add and core-plus multifamily real estate in the Southeast and Texas. The Hawthorne acquisition, structured as a joint venture with Sophus Investments, was funded with a blend of 1031 Exchange equity, 37th Parallel Fund I equity, and new investor capital from Sophus Investments.
The asset will benefit from floating-rate agency debt financing, arranged by Cutt Ableson and Colin Marusak of Berkadia. The properties will be managed on-site by Atlanta-based First Communities which manages over 18,500 units in the metro area and over 57,000 units overall.
