Sunbelt Multifamily Fund II Announcement: Georgetown Disposition

CHARLESTON, SC | February 15, 2025

The Ballast Rock Asset Management Team is proud to announce the sale by Sunbelt Multifamily Fund II (“SB2”) of Georgetown Apartments in Moultrie, GA. This 102-unit asset, the first acquisition made by the fund in February 2021, is also SB2’s first disposition.

Georgetown was sold to a boutique private equity firm through a fully marketed process. In addition to a meaningful day-one deposit, this buyer had recently closed a similar transaction in a neighboring Georgia town and had a track record as a proven closer.

See below for further information about why the fund decided to sell this asset, how the asset management and operations teams created value during the fund’s ownership and why the acquisitions team were excited to acquire the apartment community back in 2021.

Disposition Timing

SB2 acquired its 9 assets between February 2021 and January 2023, with the goal of executing each property’s individual value-add strategy to maximize value before opportunistically selling into periods of market strength.

Upon acquisition, Georgetown’s average rent was $644.85. Through our interior renovation program, strong in-house property management team, and the supply-demand dynamics of the market, we were able to reposition the asset and drive rental growth. When we sold Georgetown, its average rent was $1057.50, a 64.0% increase from when we acquired the asset and 37.4% higher than our underwritten pro-forma rent.

With Georgetown’s renovated market rents at $915 for 1-bedroom units and between $1,010 to $1,200 for 2-bedroom units, our team felt there was minimal additional revenue growth this property could achieve. As the table below shows, market rents for Georgetown are well above nearby comparable properties, including a 2019 constructed asset.

Georgetown Rents vs. Competitors

In addition, with 82% of Georgetown’s units renovated, we felt the property had achieved our value-add plan yet left enough untapped value-add potential for the next buyer to underwrite for meaningful NOI growth, which would ultimately allow us to maximize sale proceeds. As such, the team decided it was time to exit the asset, running a fully marketed process to ensure maximum value creation for our investors.

Creating Value

We invested just under $1 million in capital improvements in the asset, including interior unit renovations, amenity enhancements, and improving overall curb appeal. As a direct result of these investments, Georgetown’s trailing twelve-month net operating income (“NOI”) at sale was 80% higher than during our first twelve months of ownership.

In addition, our in-house property management team, Sunbelt Properties, increased Georgetown’s Google review rating from an average of 3.5 stars before acquisition to an average of 4.82 stars over our four years of ownership. Georgetown was also recognized as a “Best of Georgia Regional” winner in the Georgia Business Journal Real Estate Awards every year since we took ownership.

What We Saw When We Acquired the Asset

With a population of 14,600 and only 480 multifamily units, Moultrie, Georgia is towards the lower limit for a market that we would typically invest in. However, we identified a substantial lack of existing supply within the market while demand dynamics were expected to remain robust. From the date we acquired Georgetown, despite near record delivery of new units during 2023 and 2024 in the United States, only 10 additional units came online in Moultrie, representing just a 2% increase in multifamily supply for this market. This supply/demand imbalance supported our ability to drive rental growth over our period of ownership.