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Both of the properties were in Farragut. Horne-Lanesborough LLC sold the 208-unit Lanesborough Apartments, south of I-40, for more than $15.8 million, while Horne Properties, Inc. sold the Derby Run Apartments, a 72-unit complex south of Kingston Pike, for more than $5.3 million.
The buyers were LLCs linked to Sealy Management Co., which is based in Tuscaloosa, Ala. Steve Kennedy, president of Sealy, said the apartments are his company's first properties in Tennessee, and that the firm "really liked Farragut when we came up there."
"We're really looking just for a geographically diverse portfolio in the Southeast," he said. "We try to stay within about four-, five-hours drive of Tuscaloosa. ... We've got about 8,500 apartments, 40 complexes, and we just try to add one to three properties a year."
While the battered housing market and rising foreclosure levels of recent years may have seemed like good medicine for the apartment industry, that's not necessarily the case, according to Kennedy. "When employment drops, then apartment occupancy's going to drop," he said. "People move in with friends or move in with their parents or double up with someone."
But Kennedy said Farragut is "a wonderful little oasis from all that," and that the occupancy rate in the properties purchased by his firm is still in the mid-90 percent range.
Steve Massey, of CB Richard Ellis in Nashville, represented Horne Properties on the deal.
Steve Goldman, a broker with NAI Knoxville, said there are more buyers than sellers right now when it comes to multifamily properties, although he agreed occupancy is down a little bit. He said the interest is due to the fact that "there are plenty of buyers who do have the capital ... to invest, and they're looking for properties that make sense. And it is not just bargain properties."
Horne Properties developed Derby Run in the early 1990's, and Lanesborough in the mid-90's, according to senior vice president Tom Wheeler.
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