Rare Value Add Opportunity Near Vanderbilt University

The opportunity is to buy a historic community in the prestigious Vanderbilt submarket with a trailing NOI of $440,777 based on Effective Rents approximately 50% to 75% below Market Rents in the West End/Midtown neighborhood for 2 to 4 Star communities, according to CoStar and supporting Rent Comps. Furthermore, The Lee Apartments could be upgraded to reflect the demand sought by the neighborhood demographics with rents that would approximate those in the neighborhood of a mortgage for a $400,000 Condo. For sale housing in this neighborhood is in strong demand. Potential upgrades could include washer/dryer connections; updated elevator cabins; refinished/restored hard wood floors for each unit; an updated electrical system from aluminum to copper; renovated basement area for common area space to include a new laundry room or recreation opportunities; updated kitchen appliances and fixtures to enhance the kitchen/dining experience.
Property Taxes: The Real Estate Property Appraisal for The Lee Apartments was set in 2021 at $15,200,000; The next Reappraisal is 2025.

After converting to an Airbnb hospitality operation in 2018, The Lee Apartments have reestablished their market position in the Mid-Town area of Vanderbilt University as a conventional multifamily community. Today the resident profile is composed of Vanderbilt graduate students as well as young professionals who work in the nearby hospitals and office buildings. Occupancy the past 6 months has been near 100% although 26 of those units were still in use as Short Term Rentals. Today, management is eliminating those remaining 16 LTR and STR leases in favor of conventional leases. In the past year capital improvements included a new hot water boiler system for the entire community.

Built in 1921 (Circa) for physicians and nurses employed at Vanderbilt Medical University with living quarters separated by a concrete fire wall in the middle, The Lee reflected the classic architectural styles of the 1920’s. All apartments were finished with hard wood floors and large windows, many of which are bay windows, for natural light in the apartments. Over time the units have been upgraded with WiFi internet and cable TV. The HVAC remains window air conditioning and steam heat via radiators powered by a new natural gas boiler purchase in January 2021.

Additional Upgrades In 2016 the owner upgraded all exterior windows with double pane vinyl windows for better heating and air conditioning efficiency. In addition, the owner invested approximately $6,000 per unit to improve utility lines, pressure wash/brick repair, parking lot/fencing, appliances, countertops, cabinets, electrical, fixtures, plumbing, flooring, radiators, replace toilets and tubs, and add tile backsplash to kitchen area.

Average household income within a three-mile radius is over $95,000. 31% of households earn over $100,000 in three-mile radius. Forecasted Household Growth Rate of 13% in three-mile radius between 2020 and 2025

The classic architecture and varied floor plans at The Lee Apartments provide a unique charm to the most affordable housing community in the Midtown/West End submarket. From the inside the building is divided into two sections with a masonry fire wall in the middle separating the two sides from top to bottom. The exterior offers two attractive front doors for access to the elevator on each side. The entry way is furnished for guests to wait on residents to arrive downstairs. Each side has their own elevator.
The flooring in the hallways is the original travertine stone. Each side provides a walk up stair case from the basement to the 6th floor. The Lee is an all masonry construction for a six story building plus a full length basement. The building includes two elevators as well as two staircases to the top floors. The basement includes a laundry room, the boiler room and storage rooms plus two apartments in current operations. Apartments and hallways feature 9 1/2 ft. ceilings; The kitchen and bathroom floors feature tile flooring and faux wood tile. All units have hardwood flooring in the main living rooms and bedrooms as well as hallways. Plaster walls painted white maintain noise levels. Every unit benefits from the Comcast WiFi system for The Lee.

According to a recent study on Niche.com (A reputable website that caters to schools and individuals or families seeking good students, schools, neighborhoods, or jobs.), the Elliston Place neighborhood (where The Lee is located) was ranked the number one place to live in the State of Tennessee. Elliston Place ranked high in many categories, including those related to housing, families, and nightlife. The Lee Apartments with its nearby location to Vanderbilt University and three major hospitals presents an interesting investment opportunity for a moderate value add renovation with a potential redevelopment in the future for new construction. The Lee is located directly behind Loews Vanderbilt Hotel and Caterpillar Financial Headquarters located on West End Ave. In 2019 Hyatt House built a new 12-story hotel next door to The Lee on the east side. The Graduate Hotel located one block east on West End is another new hotel located near The Lee Apartments

The Lee offers a convenient, walkable location to Vanderbilt for faculty, staff, and students who live at The Lee; Resident doctors, nurses and staff from the three major hospitals located within a one mile radius, call The Lee home. Vanderbilt Medical combined with Vanderbilt University is the largest private employer in Middle Tennessee. Vanderbilt University employs approximately 4,000 faculty and staff along with 12,500 students. In addition, Vanderbilt University Medical Center and Children's Hospital employs approximately 17,000 faculty and staff.

The Lee is surrounded by new Class A apartment communities with rents significantly higher than The Lee. Substantially higher rents could be achieved at The Lee with upgraded interior features. In addition, The West End office market of approximately 3.5 million Square Feet of nearby class A and B office space located along West End Ave support over 12,000 employees. For many residents, the best reason to live at The Lee is the recreational opportunities that abound in the nearby Centennial Park with approximately 130 acres available for walking, plus tennis and indoor swimming at The Centennial Sportsplex. During the warmer months, regular musical events scheduled in the Parthenon Outdoor Pavilion make this neighborhood the heart and soul of Nashville. Finally, over 60 quality restaurants are located within walking distance from The Lee Apartments.

The Lee provides an ingress curb cut and drive to the parking lot located behind the building as well as an egress curb cut at the other end of the building making it ideal for traffic flow. The Lee features attractive landscaping of seasonal flowers and shrubbery to complement the classy exterior appearance of The Lee. The Lee counts the Loews Vanderbilt Hotel and the Hyatt Hotel as neighbors from across the street and next door.