Nashville can expect to witness a new record-high sales price for an apartment complex very soon — potentially by the end of this month. Southern Land Co. has selected a buyer for its Elliston 23 mixed-use apartment complex, located in Midtown within walking distance of Vanderbilt University and Centennial Park, according to Southern Land's Michael McNally. Nashville's real estate community has come to expect the Elliston sale to shatter the current per-unit price for an apartment development. McNally, an executive at Southern Land, assures me that will be the case.
"We will be blowing through the current record," said McNally, who is vice president of multi-family development. "It will be a big number. Everybody knows that." If it merely matched the current per-unit record — the $220,000 mark recently set by the sale of Vista Germantown— Elliston 23 would sell for $72.8 million.
The pending sale, which McNally said he hopes to close by month's end, escalates what was already a red-hot seller's market for Nashville apartments. Each recent sale has one-upped the previous one, and some complexes hit the market during the middle of construction. (Southern Land altered its own plans for Elliston 23 soon after it opened, another sign of the ongoing buying frenzy).
Demographics are turning Nashville apartment complexes into attractive investments. Nashville was one of the fastest-growing cities in the nation last year. Driving that influx of new residents: millennials, who generally have a stronger interest in urban living. McNally described the prospective buyer as "someone who's been in the Nashville market before." He declined to say more. Elliston 23 has 331 apartments, a 500-space parking garage and about 15,000 square feet of ground-floor retail and restaurant space.
Vista Germantown sold last week for $53.25 million. That complex, which cost $32 million to build, has 242 apartments. That sale topped the previous record, set in January, by the West End Village Apartments. That complex sold for $51.25 million, or an average of $210,000 for each of its 244 apartments.