Sunbelt Fund II Updates > Stone Brooke and Arbordale Closing Update
Stone Brooke & ArbordaleStone Brooke and Arbordale Apartments are 139-unit and 78-unit communities in Dalton, GA. Built in 1977 and 1978, both properties are ideally situated within Dalton and will continue to benefit from the growth of Dalton’s strong underlying economic drivers. In late 2020, the previous owner set a systematic renovation program into motion, proving out strong rental premiums across all unit types at both properties. We plan to continue renovating the remaining units in the coming years, continuing to raise rents in line with current rental high-prints. As with every acquisition, Ballast Rock will leverage our experienced in-house management team to thoroughly complete interior and exterior renovations to capture an average rental premium of more than $120 per month.
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Details on the Stone Brooke & Arbordale Closing
- While this is a split property portfolio, Stone Brooke and Arbordale are only a three-minute drive from each other, affording us economies of scale from a management perspective as we are able to run both properties out of Stone Brooke’s leasing office.
- Stone Brooke boasts a median income of $56,475 and $49,613, while Arbordale has a median income of $55,749 and $51,239 in the 1- and 3-mile areas.
- Within a 2-mile radius of Stone Brooke and Arbordale, 24% and 23% of all employees work in education & health services, which we view as two of the most stable service-producing industries.
- Along with strong stable service-producing demographics, the Dalton area is anchored by the carpet and manufactured flooring industry. The city of Dalton and the surrounding Whitefield County area are known as the “Carpet Capital of the World”. Currently, more than 90% of the world’s functional carpet is produced within a 65-mile radius of Dalton. The carpet industry employs more than 30,000 people in the Whitefield County area and is home to over 150 carpet plants.
- Both Stone Brooke and Arbordale are primed to take advantage of a significant supply-demand mismatch for rental units in the Dalton area. According to the US Census Bureau, 56.4%, or ~19,400 out of 34,000, Dalton residents are renters. However, there are only 2,563 market-rate rental units in Dalton and its combined suburbs. This critical supply-demand mismatch is at the core of all of our multifamily investments but is especially accentuated in the Dalton MSA.
- Our plan for both properties is to upgrade exteriors, amenities and continue deluxe upgrades (appliances, countertops, flooring, lighting, bathrooms, and other miscellaneous improvements). We’ve budgeted more than $13.5k per unit per property to complete these upgrades.
- Since our initial underwriting in December, the financial performance of both properties has remained strong; rents have increased by 3.9% at Stone Brooke and 4.1% at Arbordale.
- Both Stone Brooke and Arbordale are located only a half-hour away from the head of our property management arm and two hours from our acquisitions and asset management teams. This proximity to the top member of our operations team gives us confidence that we will be able to quickly hit the ground running operationally, avoiding hiccups that often occur during asset take-over.
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