S2 Capital buys Charlotte apartments

352-unit complex in Collingwood is Dallas-based firm’s fifth acquisition in city

S2 Capital Buys Apartments in Charlotte’s Collingwood
S2 Capital’s Scott Everett with 1100 Falls Creek Lane (S2 Capital, Google Maps, Getty)

A Dallas-based investor has purchased an apartment complex in the Collingwood neighborhood of Charlotte.

S2 Capital bought the 352-unit Timber Creek apartments, at 1100 Falls Creek Lane, from Dallas-based investment management firm Highland Capital Management, according to Mecklenburg County property records.

The terms of the sale, including price, were undisclosed. The 24-building property is valued for tax purposes at almost $50 million, up from $32 million last year. The 2023 valuation comes to more than $141,000 per unit.

This was S2’s fifth multifamily acquisition in Charlotte. The firm will be rebranding the property as The Marley and plans renovations to building exteriors, outdoor amenities and unit interiors, according to a news release.

The property offers studio, one- and two-bedroom apartments; rent prices aren’t publicly available. It is near the Blue Line of Charlotte’s Lynx light-rail system and 6 miles from downtown.

“Apartment demand in Charlotte is replicating that of much bigger cities with more sizable populations,” a Marcus & Millichap report said.

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The Charlotte apartment market’s net absorption exceeded 5,000 units in the third quarter, one of only six metros in the country to do so, it said. The other five were Dallas-Fort Worth, Houston, New York, Phoenix and Chicago, all of which have populations at least twice the size of Charlotte.

About 37,000 apartment units were in the construction pipeline as of August, according to Marcus & Millichap.

Charlotte is one of the best places in the country for employment growth, a top indicator of a strong apartment market. It is expected to be the only Sun Belt market to add more jobs this year than in 2022.

“S2’s multifamily investment approach targets high-growth markets across the U.S., and our team is always searching for attractive properties in flourishing cities like Charlotte,” said S2’s Davey Leach.

The multifamily syndicator was the largest apartment buyer in Texas in 2021, when it acquired 10,000 units. While S2 has taken its foot off the gas this year — it made its first buy in September — no troubles have come to light.

That’s not the case for some multifamily syndicators, such as GVA and Tides Equities. Syndicators, which pool cash to buy real estate, used floating-rate debt to buy properties when debt was cheap and then faced ballooning obligations once rates increased, and many have defaulted.

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