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1/22/15
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TruAmerica Multifamily, in partnership with a syndicate of domestic and international institutional investors including The Guardian Life Insurance Company of America® (Guardian) and Allstate, has acquired a 14-property, 2,669-unit multifamily portfolio for $482 mil ($181k/unit). We’re told the transaction represents the largest multifamily asset purchase in Southern California in nearly two decades.
The portfolio, acquired from Newport Beach-based JH Real Estate Partners Inc, is comprised largely of 1980s vintage Class B apartment communities in Los Angeles County, San Diego County and the Inland Empire. Each property within the portfolio fits into TruAmerica’s double bottom-line business plan to acquire and improve the operating performance of well-located mid-tier assets in primary Western US markets and transform them into affordable, higher quality workforce housing.
“Class B rents are expected to rise at least 5% across most Southern California market sectors this year,” said TruAmerica CEO Robert Hart. “While we intend to benefit from the expected rise in rental demand, it is TruAmerica and its partners’ mission to create affordable, well-amenitized housing for the American workforce.”
TruAmerica foresees tremendous value-add upside across the portfolio in a number of areas and will invest an additional $40 mil in its execution of a repositioning strategy that will include targeted property-specific exterior and interior unit upgrades, and community amenities. Properties will benefit from significantly enhanced pool areas, leasing offices, fitness centers and landscaping. Residents in freshly renovated units also will enjoy new and improved countertops, appliances, cabinets, flooring and light fixtures.
The portfolio acquisition was leveraged with a $354 mil FannieMae Credit Facility from Berkeley Point Capital, which was originated by Senior Managing Director Mitch Clarfield. The sizable agency facility, featuring a mix of fixed- and floating-rate, variable term loans with an exceptional blended interest rate of 2.59%, provides tremendous financing flexibility across the existing portfolio and gives the investor group the capability to acquire additional assets.
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