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10/30/15
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TruAmerica Multifamily has wrapped up another institutional-quality multifamily buy in Salt Lake City, picking up two properties for $102 mil, in a venture with The Guardian Life Insurance Company of America. This latest acquisition consists of the 486-unit Somerset Village Apartment Homes in West Valley City, and the 440-unit Southwillow Apartments in West Jordan.
Both properties are of mid 1980’s vintage and located seven miles from one another on Redwood Road, one of the state’s busiest thoroughfares. Collectively, the properties are 99 percent leased. They were sold by San Francisco-based Jackson Square Partners.
The transaction comes on the heels of TruAmerica’s acquisition last month of Settler’s Point, a 416-unit community in Salt Lake City, from Equus Capital Partners Ltd in a transaction valued at $46 mil. The purchases bring the total number of units under management to 1,657 for TruAmerica in the Salt Lake City area. The Los Angeles-based company entered the market in May with the acquisition of the Crossing at Daybreak, a 315-unit apartment home community in South Jordan, UT.
Since its founding two years ago, TruAmerica has been one of the most active buyers of multifamily assets in the United States. Salt Lake City has been a prime focus for the company as it has grown into one of the most diverse and dynamic employment markets in the nation, rivaling that of larger markets like San Francisco and New York. Technology employers and financial firms including Goldman Sachs have been adding jobs in the region pushing the city’s unemployment rate down to 3.7 percent in July, according to the Bureau of Labor Statistics’ latest metro data. The metro’s rate is well below the nationwide average of 5.3 percent for that month.
The multitude of new jobs has attracted an increasing number of Millennials to the area, helping transform Utah into the nation’s youngest state with 32 percent of its population under the age of 32, according to U.S. Census Bureau data.
“We see Salt Lake City as the perfect apartment market,” said Greg Campbell, TruAmerica’s Senior Managing Director of Acquisitions. “We find that 18 to 31-year olds are much more likely to rent than to buy, and although Salt Lake City is one of the most affordable rental markets in the nation, the number of people flocking to the region will create upward pressure on rents for highly amenitized, quality housing near jobs, shopping and dining.”
TruAmerica will invest an additional $8 mil to reposition the two properties to meet an increasing renter pool of young professionals and working families that currently live and/or are relocating to Salt Lake City, and are in need of quality affordable rental housing in the area, according to Campbell. The renovations will include new countertops, appliance packages, cabinets and flooring, as well as such common area upgrades as community outdoor kitchens, dog parks and pool enhancements.
James Wadsworth and Greg Barratt of Berkadia represented both the buyer and seller in the transaction.
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