Foundry Flats apartments sold for over $7.5 million as investors buy into Chattanooga's growing Southside
Dave Flessner, Chattanooga Times Free Press, Tenn.
April 12, 2021, 5:00 PM ·3 min read
Apr. 12—Chattanooga's emerging Southside apartment market is beginning to attract outside investors.
A new apartment complex built in the shadow of a pair of shuttered Chattanooga foundries has been purchased by a Colorado investment group eager to enter Chattanooga's rental market. A real estate group organized by Bill Bivens, an accountant and real estate investor in the Denver suburb of Edgewater, Colorado, paid $7.55 million to acquire the 44-unit Foundry Flats apartments built near the former U.S. Pipe & Foundry and Wheland Foundry.
"Chattanooga is a great place with all that is happening— and even more that could happen — between downtown and Lookout Mountain this looks like a great long-term investment," Biven said. "I wanted to get a toehold in Chattanooga because I just think Chattanooga is well positioned for growth. Nashville and Atlanta have gotten so big and expensive, but Chattanooga is that nice little town in between that has a lot of positive things going for it."
Bivens said he and a handful of other investors collectively have bought more than 3,000 apartment units from Colorado to North Carolina and he said he is interested in possibly buying other rental property in Chattanooga.
"I absolutely love Chattanooga and once our kids are done with school I would love moving down there," Bivens said.
The purchase by Biven's Foundry Flats LLC is among more than $500 million of acquisitions of Hamilton County rental properties made in the past six years by outside investment firms lured by Chattanooga's appreciating property values.
Foundry Flats, which was completed in May 2020, includes a pair of 3-story buildings that front on 25th and 26th Street, just off South Board Street and next to the KFC restaurant on South Broad. The former industrial site near the apartments is being eyed as a possible site for a new Chattanooga Lookouts baseball stadium, although no agreement for such a development has yet been inked.
Second Story Real Estate Management in Chattanooga, which began marketing and leasing Foundry Flats last summer, will continue to manage the apartments under the new owners. Foundry Flats is currently more than 80% occupied.
"It leased extremely well in some challenging times during the pandemic," said Matt McGauley, CEO of Fidelity Trust Company and one of the developers of Foundry Flats. "We're seeing a lot of people move to Chattanooga right now, especially from larger cities. That's helping to lead to strong leasing and home sales."
Foundry Flats includes studio and one-bedroom apartments, ranging in size from 429 square feet up to 703 square feet. The current monthly rent for the apartments ranges from $1,025 to $1,650. a month.
The apartments are among an array of new housing being built along the South Broad Street corridor.
Nashville developer Southeast Venture is planning a 180-unit apartment complex on a 4.4-acre tract near Chattanooga Creek near the new Publix being built on South Broad Street. Chattanooga developer Hiren Desai is also preparing to add 35 townhouses in the 2500 block of Cowart Street in the first phase of the proposed new development. And Off West 33rd Street near Chattanooga Christian School, a Knoxville developer, Neyland Apartment Associates, has plans for hundreds of new housing units in a new $75 million development.
In 2018, planners in the South Broad District envisioned a mixture of new housing and retail for the area just south of Interstate-24. A blueprint also included a multi-use minor league baseball park anchoring the area in the 141-acre U.S. Pipe/Wheland Foundry site among other development.
Contact Dave Flessner at dflessner@timesfreepress.com or at 423-757-6340
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