Passco Cos., alongside joint venture partner Greystone, has acquired One Riverwalk, a 303-unit luxury multifamily community in Knoxville, Tenn., from developer Southeastern for $120.7 million. The deal represents the largest apartment acquisition in Passco’s history.
The new owners also assumed a 10-year $64.3 million Freddie Mac loan bearing a 3.12 percent fixed rate with more than three years of interest-only periods remaining. Assumption of the debt was key to both firms finding mutually beneficial motivations for the transaction during a time when multifamily deals are down nearly 75 percent since last year, Passco said in a statement.
Located at 151 E. Blount Ave., One Riverwalk was completed in 2019 and was 97 percent occupied at the time of the sale. The 3.35-acre waterfront property has views of downtown Knoxville and the Tennessee River. It is adjacent to the Riverwalk and public event space. The community has two five-story buildings offering a mix of studio and one- and two-bedroom units which average 884 square feet. Community amenities include a business center, conference room, fitness center, clubroom, saltwater pool, grilling area, dog spa and electric vehicle charging stations.
Expanding portfolio
Passco has a long-term relationship with Southeastern, the developer of One Riverwalk, and was able to negotiate the direct purchase of the property. This is the third direct transaction between the two firms since 2019. Passco acquired One Hampton Lake, a 330-unit Class A community in Bluffton, S.C., in September 2020 for $78 million and Grand Oaks at Crane Creek, a 300-unit Class A community in Augusta, Ga., in August 2019 for $58 million. Passco currently has $4 billion in assets under management across the country and is actively growing its portfolio in primary and secondary markets.
The purchase of One Riverwalk expanded Passco’s holdings in the Knoxville market. The privately held Irvine, Calif.-based firm also owns Tapestry Turkey at Creek and Trustwell Living of West Knoxville.
One Riverwalk is built on a former hospital site in what was once an underutilized and blighted part of town which has since transformed, Passco said in a statement. The acquisition is also part of an ongoing collaboration between the firm and Greystone, which made a minority investment in Passco in 2022.
