Ares Management Corp. picked up an Atlanta apartment complex in a deal that shows institutional investors aren't worried about multifamily oversupply.
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Los Angeles-based Ares purchased Block Lofts, a 244-unit, five-story apartment project at 745 Ralph McGill Blvd., for $69.5M on March 11 from Carter-Haston Real Estate Services, according to Fulton County records.
Block Lofts is just east of the Historic Fourth Ward Park and half a mile south of Ponce City Market. The building also has 69 individually owned condo units that were not a part of the sale, Carter-Haston Partner John Carter said in an email.
Carter-Haston had owned the property since 2012, when it paid $34.2M to acquire it, according to property records. Ares' acquisition works out to $285K per unit and a 102% increase in value.
Nashville-based Carter-Haston operates more than a dozen properties in Metro Atlanta, including Edge on the Beltline off DeKalb Avenue, Vireo high-rise apartment tower off 13th Street, The Reserve at Johns Creek Walk and The Dagny Midtown.
Neither Ares nor Carter-Haston responded to messages seeking comment.
Ares' purchase comes amid a historic construction surge in Metro Atlanta, with 19,300 new apartment units under construction after a record 24,000 were delivered last year, according to Cushman & Wakefield. The glut of new apartments pressured vacancy rates upward to nearly 12% in the fourth quarter and rents downward 6.3% between September 2023 and 2024, according to Lee & Associates.
Transaction volumes have been muted as apartment owners have been unwilling to sell properties amid lower values, down as much as 20% from the peak in 2022, according to Green Street.
Last year, $5.4B worth of apartments sold in Metro Atlanta, up from $4.7B the year before but a far cry from the heyday of 2021 and 2022, when nearly $20B and $14.4B traded hands, respectively, according to CoStar data previously obtained by Bisnow.
But Ares is sitting on a record $133B in dry powder, CEO Michael Arougheti said during an earnings call last month. The firm also raised a record $92.7B in 2024, topping its previous one-year record by $15B, Arougheti said. Ares also invested more than $106B last year, a 50% jump from 2023.
Michael Bull, president of the Atlanta brokerage firm Bull Realty, said investors like Ares are banking on the pain of falling rents being short-lived in Metro Atlanta.
“Because of the rapid increase in interest rates we have and high construction costs, starts for new communities are really low,” Bull said. “We’re probably going to have flat rental [rate] increases for the next year or so. But as soon as this new supply is absorbed, we’re probably going to see another historic run-up of rental rates.”
CORRECTION, APRIL 1, 11:30 A.M. ET: The sale of Block Lofts was for the 244-unit rental component and didn't involve 69 condominium units in the building. This story has been updated.
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