JACOB STEIMER | MBJ From the Memphis Business Journal
MEMPHIS, September 30, 2019 – A recently renovated Melrose Street property is proving the strength of the Midtown apartment market, with some tenants waiting up to a year for an apartment.
The Melrose Midtown, located at 775 Melrose Street, is located in the historical Central Gardens neighborhood, on the south side of Midtown. It is also one-half a block from Central Avenue, where early-1900s mansions and the University Club of Memphis sit.
As the final touches were applied to its renovation, the Melrose is nearly 100 percent occupied, with rooms renting for $1.47 per square foot per month. For comparison, the Tennessee Brewery apartments initially rented for $1.53 per square foot.
“There is tremendous demand for high-quality apartments [in Central Gardens],” said the developer, Chris Robbins of Talus Properties. “At times this summer – we had three times the number of applicants as we had apartments.”
Talus acquired the 100,000-square-foot building for $2.3 million in January 2017. Since then, about $2.4 million worth of building permits have been filed at the address, according to the Shelby County Assessor of Property.
Unlike the large majority of major multifamily developments in Midtown and Downtown, the project did not receive a PILOT (payment-in-lieu-of-taxes), government subsidies, or government incentives. Robbins indicated that his company has never sought or accepted public funds.
Robbins said the property’s capitalization rate is in the high 30s. Belzoni, Mississippi-based Guaranty Bank & Trust Co. was the lender on the project, and Robbins called it the best bank he’s worked with in his 20-year career. “Their construction lending team was wonderful to work with,” he said.
The Melrose building is the largest Robbins’ Team has developed as an owner, to date. For projects its size or larger, Talus has served in a property and construction manager role in the past. This presented challenges. “We had to really be creative and make thousands of decision that previously had been made for us, but we did it, and the product speaks for itself.”
As to the product, the Melrose recently won the Memphis Most award for Best Apartment Community in Memphis.
At present, the Melrose has only two apartments left. It is also accepting waitlist applications on several popular models. In some cases, tenants must make reservations in advance to be guaranteed an apartment.