Aug 26, 2019
Tenth Street Ventures and Braden Fellman Group bought multiple apartment buildings in Morningside/Lenox Park, Atlanta, with plans to create a unified community by rebranding them as one garden style apartment complex called The Piet. The exterior, to be painted by artist Chastain Bernard will be inspired by the neoplasticism movement with visual compositions of vertical and horizontal shapes using only black, white and primary colors to simplify and unify the buildings’ exteriors.
In this nearly $42 million transaction, TSV & BFG bought 13 buildings from multiple owners, totaling 335 units over 12.5 acres. At complex, anchored by the 2175 Lenox Road NE building, the team also plans to connect the 1960s- and 1970s-era buildings with walking trails, two pools, several dog parks, more than a dozen grill stations, bocce ball courts and putting greens. Jake Reid, Chad DeFoor and Roger Schoerner of Franklin Street’s Atlanta multifamily investment sales team, brokered the deal. Wesley C. Turner with Krevolin Hurst was the real estate attorney for the deal.
CBRE’s Yakhin B. Israel, CCIM, arranged the $40.9-million loan with lender MF1 Capital, LLC to finance the acquisition and renovation of the portfolio. The loan was funded in two phases to accommodate the sponsors’ closing timeline for the assemblage, which included three different sellers. MF1 closed the first phase in 10 business days.
TSV and BFG have created a strategic partnership combining Braden Fellman’s proven track record in the multifamily space with Tenth Street Venture’s design-focused renovations. Tenth Street is a dynamic collaborative of developers, designers and builders who are bringing more affordable market rate housing to Atlanta. Founded in 1981, Braden Fellman owns and manages more than 1,700 apartment units and 55,000 square feet of commercial space in metro Atlanta.
“We approach real estate differently,” said Brian McCarthy, a principal at TSV. “We find older properties that could use some attention and give them a design-focused renovation that appeals to our target market keeping the current and future residents in the forefront of our design decisions. We make decisions on what's best for the end user without overspending. That’s because we have a vision and plan to keep these renovated, beautiful homes within reach so that Atlanta continues to have housing at more affordable prices and make people proud of where they live.”
Added Andrew Braden of Braden Fellman, “This joint venture was created by a group of innovators who are thinking about real estate in a completely different way. The duo is similar to any new tech start-up in that they we are generating innovative ways to tackle the current challenges related to providing housing. We’re not afraid to contest conventional ways of thinking. I expect amazing things out of our team over the next 5 to 10 years and beyond.”
TSV – which buys, designs and renovates properties with their in-house team – has gone from zero assets under management to over $100 million and 500+ units nationally in the last two years. TSV is led by an under-40-year-old management team, trained at the top commercial real estate companies and universities in the country in deal structuring, finance, asset and property management, construction management, architecture and design.
“TSV’s relatively fast growth has been impressive, a result of the combination of solid relationships, savvy project choices, smart financing and excellent execution,” said CBRE’s Israel, the finance partner who arranged the debt for the acquisition of the Morningside apartments. Mr. Israel also recently arranged a $9.8 million bridge loan with MF-1 for the TSV/BFG acquisition and renovation of a 67-unit apartment community in Decatur, Ga.
TSV is working on raising new funds from investors for other similar investments this fall. TSV has been focusing on buying older buildings in popular intown neighborhoods then either renovating to sell as condos or lease as apartments. A few recent projects include:
* In the spring, TSV opened Studio9Forty, an apartment project just blocks from Piedmont Park with spacious apartments and décor inspired by Studio 54, and offers residents the option to Airbnb their units if desired.
* In Buckhead, TSV renovated older buildings to develop Portico, where people can buy large, 2-bedroom condos for as low as $275,000.
* Also in Midtown, TSV recently purchased an apartment complex on Crescent Street at 13th Street that includes Tin Lizzy’s and Sutra Lounge and 14 units above creating a very unique opportunity for a new type of mixed-use project.
* TSV and BFG purchased three Decatur apartment complexes, including Adair Oaks, and plan to renovate the 100+ units using a protégé of Ryan Gainey, the renowned landscape architect who called Decatur home and had lived one street over. Cooper Sanchez will work on the landscape design and art for the exterior using Gainey’s essential design philosophies.