ORIX pays $87.5 million for Buckhead apartments, 17% below 2019

ORIX Corporation USA has purchased The Kendrick, a 423-unit garden-style apartment property in Atlanta's Buckhead, for $87.5 million, according to Connect CRE, which carried an Atlanta Business Chronicle report identifying Passco Companies as the seller. Passco bought the community in late 2019 for about $106 million, putting the new sale price roughly 17 percent lower.

The Kendrick is one asset in ORIX's three-property multifamily portfolio spanning Texas and Georgia — 1,029 units at a $200 million price tag in this publication's prior coverage — and it carries the bet on operations rather than market timing that ORIX USA's larger move implied.

Built in 1998, the property offers one-, two- and three-bedroom plans up to 2,300 square feet, a pool, tennis courts, a three-story clubhouse and a fitness center, and sits along Canterbury Road near the interchange of Interstate 85 and State Route 400, about 2.5 miles south of Buckhead's commercial corridor. ORIX plans capital improvements to modernize units and common areas. At roughly $207,000 a unit, the buyer is paying below the 2019 cost on a 28-year-old building and expecting the renovation program, not rental market momentum, to make the return.

The gap between the two purchase prices — about $18.5 million before any other costs — is a public measure of how much apartment pricing has reset in this submarket. By attaching a value-add plan at that level, the buyer is underwriting the asset's operation rather than the broader cycle. The rest of the portfolio, another 606 units, will show whether the same math holds outside Buckhead.