Hamilton Pines Apartments

3301 Pinewood Ave  Hamilton County, TN 37411

Min. Invest
$25,000
Target Hold
60 mo
Annualized Returns
11%
Progress - 2% Pledged
Picture10.jpg

Picture10.jpg

Picture1.jpg

Picture1.jpg

Picture2.jpg

Picture2.jpg

Picture3.jpg

Picture3.jpg

Picture4.jpg

Picture4.jpg

Picture5.jpg

Picture5.jpg

Picture6.jpg

Picture6.jpg

Picture7.jpg

Picture7.jpg

Picture8.jpg

Picture8.jpg

Picture9.jpg

Picture9.jpg

Project Summary

ARIAM in partnership with The Reliance Solutions Group has the opportunity to acquire Hamilton Pines (“Hamilton”) in Chattanooga, TN for $2.75 million. The property was acquired for $1.7 million by the Seller in 2018, who has spent approximately $350k in capital renovating the property since acquisition. To date, the seller has renovated 31 of 56 units, replaced all roofs, mailboxes and renovated the onsite laundry facility. We’re budgeting $475,000 ($8,482/unit) to renovate the balance of the units and add amenities such as a playground, dog bark and gazebo/grilling area. In place rents are currently $579 on average, while the market supports rents north of $760.

Investment Type Equity
15/85 Waterfall Participation
Term 60 Months
Raise Amount $1,205,450
IRR 17.7%

Why Invest?

  1. Cash flowing property allows for 6% preferred return to be paid current.
  2. Stabilized property allows for permanent debt financing at 3.5% fixed.
  3. Well maintained property with substantial renovation completed already: new roofs, new mailboxes, new laundry facility, 31 of 56 units renovated.
  4. Sponsor team includes experienced multifamily Operator and General Contractor.
  5. Below market rents provides the opportunity to raise rents to market (24.5% premium).
  6. All units are individually metered for water.
  7. The property is conveniently located just outside of Downtown Chattanooga (3.7 miles to City Center) offering residents quick and easy access to the city’s employment centers, restaurants, shopping and entertainment venues including the world-renowned Tennessee Aquarium. The property is also within 2.6 miles to the University of Tennessee Chattanooga (2019 enrollment of 11,638 students), 2 miles of the 4,000+ staff Chattanooga Memorial Hospital and 5.2 miles to Chattanooga Airport. Chattanooga has seen tremendous growth in population, employment, wages, and rental rates over the last few years.

Opportunities

  1. Continue and improve upon unit renovation program to further drive rents
  2. Add amenities to better compete with surrounding properties
  3. Add other income charges such as trash, pest control, pet rent and “risk” fees in lieu of security deposits
  4. Convert existing office back to rentable unit
  5. Room to add storage units for additional income. Not underwritten

Hamilton Pines Apartments

The $2.75M purchase represents a 8% cap rate on in-place NOI and an 10.2% cap on year 2 stabilized NOI. The project generates a levered IRR of 17.7%, 11.0% average COC return, $1.1 million whole dollar profit and a 2.1x multiple over a 5-year hold period.

Financial Sources

Debt $2,510,000
Equity $1,205,450
Total $3,715,450

Financial Uses

Purchase $2,750,000
Closing Costs $107,650
Reserves $225,000
Acquisition Fee $82,500
Loan Costs $75,300
Construction Costs $475,000
Total $3,715,450

Property Summary


Hamilton Pines is a 56-unit garden style apartment complex conveniently located near Downtown Chattanooga. The property was built in 1967 and consists of 6 apartment buildings. The property consists of all 2-bedroom, 1-bath units with large 900 sf floor plans that exceed the market averages. The property is currently 98.2% occupied at rents nearly 25%, or $181 dollars, below market levels. The current owner has already demonstrated the ability to achieve rents of $725 on several renovated units. As we renovate the balance and add amenities to the property, we plan to bring the remaining units inline with market rent while maintaining mid to high 90% occupancy rates.

Address Property Type Units Buildings Current % Occupied Avg. Unit Size
3301 Pinewood Ave
Hamilton County, TN 37411
Multi Family 56 6 98.20 900

Why Chattanooga? 

Chattanooga is one of the best secondary markets in the Southeast with strong job growth and excellent connectivity to surrounding metros. It's location and position along the Tennessee River has made is it a strategic transportation hub for industry and commerce. Chattanooga is situated at the center of 5 key cities (Atlanta, Nashville, Knoxville, Birmingham, Huntsville). Interstates 75, 24, and 59 converge at Chattanooga and CSX and Norfolk Southern rail lines serve the area. In 2010, Chattanooga became the first "Gig City" in the U.S., providing citywide one gigabit per second internet service. By 2015, the Electric Power Board of Chattanooga (EPB) began providing all of its customers with access to 10 gigabit speeds. Since 2014, over $3B in business investments have been added, bringing more than 11,000 jobs. According to the U.S. Census Bureau, Chattanooga's population grew at a compound annual growth rate ("CAGR") of 1.2% from 2011 to 2017, outpacing the U.S. at 0.8% CAGR. Median home values rose over the same period by a 2.8% CAGR, while the U.S. grew at 0.6% per year. Median household income grew at 2.2% per year versus the U.S. at 1.5%. Chattanooga's unemployment rate decreased by 3.6% from 2011 to 2017.

Major Employers

  1. Erlanger Health System
  2. Volkswagen
  3. BlueCross BlueShield of Tennessee
  4. Tennessee Valley Authority
  5. McKee Foods
  6. Unum Group (Fortune Ranking 273 / 500)
  7. Amazon.com
  8. Pilgrim's Pride
  9. Cigna HealthCare
  10. Coca-Cola Bottling
  11. University of Tennessee at Chattanooga

The Volkswagen Effect

Volkswagen opened its $1B assembly plant in 2011, which serves at the company's North American Headquarters and employs more than 2,500 people. The company is currently underway on an $800M assembly plant expansion to manufacture compact electric SUVs. The expansion will create more than 1,000 jobs for Chattanooga.

Contact Sponsor

Required fields are denoted by an asterisk (*).

Name *
Email *
Phone
Message *

CERTAIN INFORMATION REGARDING THIS OFFERING

THESE UNITS ARE BEING OFFERED WITHOUT REGISTRATION UNDER ANY FEDERAL OR STATE SECURITIES LAWS, BUT ARE BEING OFFERED UNDER AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND UNDER COMPARABLE EXEMPTIONS UNDER VARIOUS STATE SECURITIES LAWS. HOWEVER, THE SECURITIES AND EXCHANGE COMMISSION (“COMMISSION”) HAS NOT DETERMINED THAT THESE UNITS ARE EXEMPT FROM REGISTRATION. THESE UNITS HAVE NOT BEEN REVIEWED, APPROVED OR DISAPPROVED BY THE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY, ADEQUACY, COMPLETENESS OR MERITS OF THIS MEMORANDUM, AND ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THIS MEMORANDUM DOES NOT CONSTITUTE AN OFFER TO SELL TO, OR A SOLICITATION OF AN OFFER TO BUY FROM, NOR SHALL ANY OF THE UNITS BE OFFERED OR SOLD TO, ANY PERSON IN ANY JURISDICTION IN WHICH SUCH AN OFFER, SOLICITATION, PURCHASE, OR SALE IS UNLAWFUL OR UNAUTHORIZED UNDER THE SECURITIES LAWS OF SUCH JURISDICTION.

THE STATEMENTS MADE HEREIN ARE MADE AS OF THE DATE ON THE COVER OF THIS OFFERING MEMORANDUM. THIS OFFERING MEMORANDUM CONSTITUTES AN INVITATION TO THE PROSPECTIVE INVESTOR TO SUBMIT AN OFFER TO SUBSCRIBE. NO PERSON MAY PURCHASE THE UNITS OFFERED HEREBY EXCEPT PURSUANT TO AN EXECUTED SUBSCRIPTION AGREEMENT IN THE FORM PRESCRIBED BY THE FUND, AND THEN ONLY FROM A PERSON TO WHOM THE FUND OR ITS DESIGNATED AGENT HAS DELIVERED A COPY OF THIS OFFERING MEMORANDUM.

THESE UNITS ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED BY THE FUND. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THERE IS CURRENTLY NO PUBLIC MARKET FOR THESE UNITS.

IN MAKING A DECISION TO PURCHASE UNITS HEREUNDER, PROSPECTIVE INVESTORS MUST CONDUCT THEIR OWN INDEPENDENT INVESTIGATION OF THE FUND AND THE TERMS OF THIS OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED, AND ARE ENCOURAGED TO CONSULT WITH THEIR ADVISORS AS THEY WILL BE REQUIRED TO REPRESENT THAT THEY ARE ABLE TO BEAR THE ECONOMIC RISK OF THEIR INVESTMENT AND THAT THEY ARE FAMILLIAR WITH AND UNDERSTAND THE FUNDAMENTAL RISKS AND TERMS OF THIS OFFERING.

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATION WITH RESPECT TO THE OFFERING OF THE UNITS WHICH IS NOT CONTAINED OR REFERENCED HEREIN, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. POTENTIAL INVESTORS MAY, IF THEY SO DESIRE, MAKE INQUIRIES OF THE FUND WITH RESPECT TO THE FUND’S BUSINESS OR ANY OTHER MATTERS SET FORTH HEREIN, AND MAY OBTAIN ANY ADDITIONAL INFORMATION WHICH SUCH PERSON DEEMS TO BE NECESSARY IN ORDER TO VERIFY THE ACCURACY OF THE INFORMATION CONTAINED IN THIS MEMORANDUM (TO THE EXTENT THAT THE FUND POSSESSES SUCH INFORMATION OR CAN ACQUIRE IT WITHOUT UNREASONABLE EFFORT OR EXPENSE).

April 05 2020

Confidential Offering Memorandum: Ariam Partners

PROSPECTIVE INVESTORS ARE CAUTIONED NOT TO CONSTRUE ANY CONTENTS OF THIS OFFERING MEMORANDUM OR ANY PRIOR OR SUBSEQUENT COMMUNICATIONS, AS CONSTITUTING INVESTMENT, LEGAL OR TAX ADVICE; RATHER THEY SHOULD CONSULT THEIR OWN ADVISORS OR COUNSEL WITH THE CAPACITY TO ADVISE AND PROTECT THEIR INTEREST IN CONNECTION WITH ALL MATTERS CONCERNING THIS OFFERING MEMORANDUM.

THIS OFFERING MEMORANDUM DOES NOT KNOWINGLY CONTAIN ANY UNTRUE STATEMENT OF A MATERIAL FACT OR OMIT A MATERIAL FACT, AND ANY SUCH MISSTATEMENT OR OMISSION IS DONE WITHOUT THE KNOWLEDGE OF THE PREPARERS OF THIS DOCUMENT OR THE FUND. AS SUCH THE FUND BELIEVES THAT THIS OFFERING MEMORANDUM CONTAINS A FAIR SUMMARY OF THE MATERIAL TERMS OF ALL MATTERS, DOCUMENTS AND CIRCUMSTANCES MATERIAL TO THIS OFFERING. WHILE THE DATA AND STATEMENTS CONTAINED HEREIN ARE BASED UPON INFORMATION BELIEVED TO BE RELIABLE, NO WARRANTY CAN BE MADE AS TO THE ACCURACY OF SUCH INFORMATION OR THAT CIRCUMSTANCES HAVE NOT CHANGED SINCE THE DATE SUCH INFORMATION WAS SUPPLIED. THIS MEMORANDUM CONTAINS SUMMARIES OF CERTAIN PROVISIONS OF DOCUMENTS RELATING TO THE BUSINESS OF THE FUND AND THE UNITS OFFERED HEREBY, AS WELL AS SUMMARIES OF VARIOUS PROVISIONS OF RELEVANT STATUTES AND REGULATIONS. SUCH SUMMARIES DO NOT PURPORT TO BE COMPLETE AND ARE QUALIFIED IN THEIR ENTIRETY BY REFERENCE TO THE TEXTS OF THE ORIGINAL DOCUMENTS, STATUTES AND REGULATIONS.