Author: ipgocorp

DENVER, CO – TruAmerica Multifamily and the Magnolia Real Estate Fund have acquired Fox Creek, a 287-unit apartment community in Thornton, CO in an off-market transaction valued at $53 million.  Fox Creek is the sixth multifamily investment in the Denver area for TruAmerica where the firm has acquired approximately 3,000 units in the past three years.

Built in two phases, starting in 1984 and completed in 1999, Fox Creek features a mix of large one-, two- and three-bedroom units in a low-density park-like setting.  The 19.5-acre property includes two resort-style swimming pools, clubhouse with 24-hour fitness center, playground, dog park and spa and bike shop.

“Fox Creek represents a true value-add opportunity as the majority of the units, which feature vaulted ceilings, fireplaces and full size washer/dryers, have been largely untouched,” said Greg Campbell, Senior Managing Director of Acquisitions and Dispositions for TruAmerica.    “About a quarter of the units also have lofts, an attractive feature not found at other assets in the immediate area. At our cost basis, we can implement a comprehensive and thoughtful renovation plan that will allow Fox Creek to compete with newer properties in the area and still be affordable to working families.”

The renovation will begin with improvements to common areas, including the pools and pool decks, clubhouse, fitness center, signage, and landscaping to enhance the property’s curb appeal.  TruAmerica will then begin a custom interior renovation program beginning with vacant units and continuing as units turn over so as not to displace current tenants.  Apartment upgrades will include all new stainless-steel appliances, new bathroom countertops and cabinets, faux-wood vinyl flooring in living areas, fresh paint and accent walls, and upgraded plumbing fixtures.

Fox Creek is located at 12220 Colorado Boulevard in Thornton, a bedroom community approximately 10 miles north of Denver boasting strong rental fundamentals.

Construction activity in the northern Denver submarkets has been limited compared to the overall metro Denver construction pipeline of more than 23,000 units. Just 2,564 units are being added over a large geographical area in northern submarkets, which encompass Thornton, Westminster and Arvada.  The Thornton submarket enjoys strong apartment demand, as families with children prefer this community to Denver because of its highly rated ADAMS 12 School System and affordable rents. Fox Creek is especially attractive because it is within an easy walk of retail amenities, nearby employment centers and Denver’s new RTD Eastlake Station, which will be completed in 2018. This rail station will serve the northern extension of Denver’s light-rail system to provide quick transit from Thornton to the urban core.

Fox Creek is the first investment for the newly launched McLean, VA-based Magnolia Real Estate Fund.

“The Fox Creek property presents an attractive opportunity to invest in a well-located asset at a discount to replacement cost in one of the most fundamentally sound rental markets in the nation,” said Magnolia Managing Partner David Kent.  “Most importantly, in TruAmerica we have a partner with a successful track record of creating value and delivering appropriate risk adjusted returns to its partners.”

FARMINGTON HILLS, MI – City Club Apartments (CCA) announced that it will begin managing its $2 billion, 10,000-unit apartment and penthouse portfolio. City Club Apartments CEO Jonathan Holtzman made the announcement.

“This is a historic day for our customers, investors, partners and the industry,” said Holtzman. “We are executing on the final piece of our CCA vision—rethinking, redefining and delivering the ultimate urban and suburban-urban apartment experience. From the outset, we committed to a design, hospitality, service, amenity and value creation plan that is unequaled.  And, as we move closer to full execution, we know there is no one who will care as much about our residents and our communities, or fully- realizing this big, bold and disruptive vision as we do. We are completing the ‘relationship’ with our customer.”

Beginning May 1, CCA will begin managing the first five of its 30 properties.

Those properties include: Ann Arbor City Apartments, Ann Arbor; Central West End Apartments, St. Louis; Plaza Club City Apartments, Kansas City; 800 Tower City Apartments, Louisville and CCA, CBD, Cincinnati.  All of these communities will be rebranded as City Club Apartments and the rest of the communities will transfer to CCA Management by year-end.  “This is a great story,” said Holtzman.  “It’s the beginning of the next 100 years of a company that has been innovating, elevating and creating since 1919.”

The CCA brand, which began less than a year ago with 20 employees, is expected to grow to more than 275 people by the end of 2017.  “We are recruiting the very best hospitality and apartment talent in North America,” said Holtzman. “It’s no coincidence that our executives are all owners. It’s critical that the interest of the company is always aligned with our customers and investors.”

That is reflected in CCA Management’s first two hires.  Dale Phillips, a 23-year industry veteran and former President of Mark Taylor Residential joined CCA earlier this year as President and COO of City Club Apartments Management.  Phillips is nationally recognized for his hospitality and business acumen and his ability to develop and execute on industry-leading and award-winning employee engagement, loyalty, training and growth and performance programs. He is also credited for driving tremendous value creation for the Mark Taylor portfolio. According to Phillips, one of the most integral components of his team realizing CCA’s bold vision is the fact that the company controls its real estate. “Stability is everything in our business and our ownership team manages for value and thinks generationally. That is a true differentiator,” he said.

Don Gillette, CCA’s Senior Vice President of People and Culture, joined the company after nearly five years with MGM Resorts and 15 years with Four Seasons, where he set the international bar for the delivery of uncompromising people centric service.  “We are attracting highly engaged, like-minded leaders and staff that always put the resident first, think differently, are hungry to learn and grow and wake up every morning saying ‘I want to find a better way,'” said Gillette.  “In return, we are providing them with unlimited opportunities and will invest heavily into their growth.  Highly engaged employees create highly engaged residents.”

This announcement follows the June 3, 2016 announcement that Jonathan Holtzman was leaving Village Green with all of the company’s real estate but one, and the entire $500 million new development pipeline. 

CHARLOTTE, NC – Robbins Electra, one of the fastest-growing multifamily owner-operators in the Southeastern U.S, has purchased a 408-unit apartment community in Charlotte, NC. The asset, currently known as Pavilion Crossing, will be rebranded as Grand Reserve at Pavilion.

This is Robbins Electra’s eighth garden-style, value-add property acquisition in 2017. The company now holds eight multifamily rental communities in Charlotte, totaling 2,100 apartment units. Nationally, Robbins Electra’s portfolio includes more than 23,000 apartment units totaling over $2.5 billion in value.

“We are pleased and excited to add Grand Reserve at Pavilion to our Charlotte portfolio, which now includes eight sizable properties,” said Joe Lubeck, CEO of Robbins Electra. “It is well built, well located and acquired advantageously. Our plans will include a dramatic and comprehensive renovation that we know the residents will love.”

Constructed in 2003, Grand Reserve at Pavilion is located at 1801 Willow Haven Lane and features one-, two- and three-bedroom units in three-story, garden-style buildings. The community offers resort-style amenities including a swimming pool, sports court, clubhouse, fitness center, soccer field, BBQ areas, fire pit sitting areas, among others. The property is currently 95% occupied, with average monthly rents of approximately $919.

Robbins Electra will carry out a $3.6 million property renovation, upgrading apartment interiors by including granite countertops, washer and dryer in all units, black appliances, plank flooring in common areas, updated lighting fixtures and enhancing the community’s amenities.

SACRAMENTO, CA – Pembrook Capital Management announced the acquisition of $11.4 million of debt on two California affordable housing complexes totaling 571 units, as the first step in a series of transactions that will result in the preservation of these properties as affordable housing. 

In tandem with the acquisition of the debt on two apartment properties, Pembrook has executed a forbearance agreement with the borrower which will provide them the necessary time for the re-syndication of both properties under the Low Income Housing Tax Credit (LIHTC) program and completion of capital improvements estimated at over $9M.

“We’re proud to deliver a creative financing solution that we believe will help the property ownership maintain affordability of nearly 600 apartment units,” said Stuart J. Boesky, CEO of Pembrook.  “Home affordability is a major issue across the United States, and Pembrook has a continued focus on delivering flexible, creative financing for affordable housing owners and developers.  With support from our partners at Rabobank, N.A, an organization that shares our strong commitment to affordable housing, we were able to provide a perfect solution.  By combining a loan acquisition and forbearance, we will allow two projects at the end of their tax credit compliance periods to work through a restructuring and recapitalization that will keep the apartments affordable and operating well into the future.”

Boesky added: “My team has deep experience in the affordable housing space and can quickly assess and execute on solutions for developers and owners trying to recapitalize Low Income Housing Tax Credit properties at the end of compliance period, and those seeking to acquire and rehabilitate these properties.  We find that our skill set is critical for developers and owners now that the Tax Credit market is feeling the effects of uncertainty associated with proposed tax reform.”

The properties are located in Sacramento and Los Angeles.  One property is a 386-unit affordable housing complex built in 1972 and offering a combination of high rise (306 units) and garden (82 units) apartments.  The additional property is a 185-unit affordable housing complex built in 1950.  Both properties have performed well historically, with occupancy consistently around 99%.

In addition to the transaction announced today, earlier this month Pembrook closed a $7.57 million first mortgage loan to complete the development of Alondra Villas, a 29-unit townhouse development located at 950 West Alondra Boulevard, in Compton, CA.  Neighborhood Housing Services of Los Angeles County (NHS) purchased the partially completed project approximately 18 months ago from the City of Compton.  The Pembrook loan will allow NHS to complete the construction of the project over the next nine months and sell the units to low and medium income (LMI) buyers.

Pembrook is a real estate investment manager that provides financing throughout the capital structure.  The firm has originated or participated in investments totaling over $1 billion since it began investing in 2007.

IRVINE, CA – CoreLogic, a leading global property information, analytics and data-enabled solutions provider, released its CoreLogic Home Price Index and HPI Forecast for March 2017, which shows home prices are up both year over year and month over month.

Home prices nationwide, including distressed sales, increased year over year by 7.1 percent in March 2017 compared with March 2016 and increased month over month by 1.6 percent in March 2017 compared with February 2017, according to the CoreLogic HPI.

The CoreLogic HPI Forecast indicates that home prices will increase by 4.9 percent on a year-over-year basis from March 2017 to March 2018, and on a month-over-month basis home prices are expected to increase by 0.6 percent from March 2017 to April 2017. The CoreLogic HPI Forecast is a projection of home prices using the CoreLogic HPI and other economic variables. Values are derived from state-level forecasts by weighting indices according to the number of owner-occupied households for each state.

“Home prices posted strong gains in March 2017, and the CoreLogic Home Price Index is only 2.8 percent from its 2006 peak,” said Dr. Frank Nothaft, chief economist for CoreLogic. “With a forecasted increase of almost 5 percent over the next 12 months, the index is expected to reach the previous peak during the second half of this year. Prices in more than half the country have already surpassed their previous peaks, and almost 20 percent of metropolitan areas are now at their price peaks. Nationally, price growth has gradually accelerated over the past half-year, while rent growth for single-family rental homes has slowly decelerated over the same period, according to the CoreLogic Single-Family Rental Index, recording a 3 percent rise over the year through March.”

“A potent mix of strong job gains, household formation, population growth and still-attractive mortgage rates in the face of tight inventories are fueling a continuing surge in home prices across the U.S.,” said Frank Martell, president and CEO of CoreLogic. “Price gains were broad-based with 90 percent of metropolitan areas posting year-over-year gains. Major metropolitan areas were especially hot with CoreLogic data indicating that four of the largest 10 markets are now overvalued. Geographically, gains were strongest in the West with Washington showing the highest appreciation at almost 13 percent, and Seattle, Tacoma and Bellingham posting gains of 13 to 14 percent.”

IRVINE, CA – SARES REGIS Multifamily Value-Add Fund II acquired four rental communities totaling 1,094 apartments in Washington, Colorado and Arizona in the fourth quarter of 2016, following a strong third quarter of acquisitions with purchase of three communities totaling 812 units. 

The fund, which has $304.2 million in equity commitments, has acquired a total of nine communities since 2015.

“With 2,351 apartments under management in Fund II and approximately two thirds of the fund’s equity invested, we’re in a great position to selectively fill out the balance of the portfolio in 2017,” said Bill Montgomery, chief investment officer of the SARES REGIS Multifamily Fund.  “The fund’s equity commitments can be leveraged to acquire approximately $850 million in assets,” he said.

“The fund’s objective is to capitalize on the attractive multifamily fundamentals in some of the best western U.S. sub-markets while maximizing the potential to add value through renovation and repositioning of well-located Class-B properties by leveraging SRG’s vertical operating capabilities,” Montgomery said.  “With rents at newer Class A properties at historically high levels in many markets, the ability to offer a value alternative with a quality product is compelling to many renters,” he added. 

The fourth quarter acquisitions were: Solara (238 units) in Seattle, Washington, Regatta (232 units) in Northglen, Colorado, Alanza Place (360 units) in Phoenix, Arizona, and Salado Springs (144 units) in Tempe, Arizona.

Previously, nine communities totaling 1,377 apartments were acquired with $114 million in SARES REGIS Multifamily Fund I in 2013.

Both funds are sponsored by SARES REGIS Group, a privately held firm that is nationally recognized for its acquisitions, development and management of apartments, condominiums, mixed-use communities, office and industrial buildings in the western U.S. The company manages a combined portfolio of approximately 17,300 apartment units and 21 million square feet of office and industrial space.

NEWTON, MA – Five Star Senior Living, one of the nation’s leading senior living and healthcare services providers, announced the addition of memory care apartments at Morningside of Georgetown in Georgetown, South Carolina. Five Star’s award-winning Bridge to Rediscovery (BTR) program is an innovation leader in memory care, designed to address the unique capabilities and interests of each resident, while encouraging family involvement every step of the way.

The program is research based and encourages stimulation of senses, independence and one-on-one interactions in patients suffering from Alzheimer’s and other forms of dementia.

“We are excited to bring The Bridge to Rediscovery program to the Morningside of Georgetown,” said Scott Herzig, Five Star’s Chief Operating Officer. “The new wing includes a gardening area, a new dining room and signature elements designed to engage our residents. We want our residents to feel capable and empowered by the environment they are in, and also want to encourage families’ and guests’ interactions while visiting.”

The renovation, which is designed to maximize natural light, features 14 modernized private and semi-private suites, large custom designed common areas such as family-style dining, and a beautifully landscaped secure outdoor garden with walking paths. Residents have the ability to go outside in a safe environment that gives them some independence back while keeping families at ease.

BTR is the winner of multiple Argentum (formerly Assisted Living Federation of America) “Best of the Best” awards. This prestigious national award recognizes excellence in senior living programming. Residents enjoy an award winning program as well as care provided by a professional and attentive team in a community with all of the warmth and hospitality of home.

LOUISVILLE, KY – Preferred Apartment Communities announced the acquisition of a 242-unit Class A multifamily community in Louisville, Kentucky constructed in 2012 called Claiborne Crossing. 

“Claiborne Crossing is an exceptional Class A multifamily community located in a highly desirable submarket of Louisville.  The assumed HUD debt is attractive and the product quality and unit features are excellent,” said John A. Williams, PAC’s Chairman and Chief Executive Officer.

PAC acquired this community through a wholly-owned subsidiary and financed the acquisition by assuming a first mortgage loan insured by the U.S. Department of Housing and Urban Development. 

The remaining principal balance on the HUD loan is approximately $27.1 million, bears interest at a fixed rate of 3.34% per annum and has approximately 37 years of term remaining. 

There are no loan guaranties provided by us or our operating partnership.

Preferred Apartment Communities was formed primarily to acquire and operate multifamily properties in select targeted markets throughout the United States.  As part of its business strategy, it may enter into forward purchase contracts or purchase options for to-be-built multifamily communities and make real estate related loans, provide deposit arrangements, or provide performance assurances, as may be necessary or appropriate, in connection with the development of multifamily communities and other properties. 

CHICAGO, IL – Rockwell Partners, a leading Chicago-based real estate investment and property management firm, recently completed the $30,500,000 acquisition of Mont Clare Apartments, a mixed-use property including 281 units and approximately 21,000 square feet of commercial space anchored by US Bank. 

Located 10 miles northwest of Chicago at the major intersection of Harlem Avenue and Gunnison Street in the fast-growing market of Harwood Heights, Illinois, the highly visible property consists of two 12-story towers connected by a first-floor lobby.

Apartments at the complex include a mix of studio, one, and two-bedroom floor plans.  Property amenities include a 24-hour fitness center, outdoor pool with sun deck, clubroom, business center, private multimedia theater, and underground parking.  The Mont Clare is also conveniently located in close proximity to the I-90 expressway, CTA Blue Line and O’Hare Airport, and is surrounded by shopping and dining destinations, including Harlem Irving Plaza.

Rockwell plans to make significant improvements to Mont Clare’s common areas and building amenities in addition to upgrading rental units in need of renovation.  The company also will take over the property management responsibilities for the property. 

“We believe this is a strong, improving infill location and submarket, and that there is untapped value-add potential in the common areas, amenities and operations of the complex,” said Rockwell Partners Principal Jason Fishleder.

WHITEHALL, PA – Five Star Senior Living, one of the nation’s leading senior living and healthcare services providers, announced that they will begin breaking ground on construction of a new Memory Care neighborhood this week at Overlook Green Senior Living in Whitehall, PA just outside of Pittsburgh.

Five Star’s Bridge to Rediscovery program is an industry leader in memory care, designed specifically to meet the needs of those with Alzheimer’s and other forms of dementia. The award-winning program caters to the distinct capabilities, interests and favorite activities of each resident while encouraging family involvement every step of the way.

“The Bridge to Rediscovery program has reinvented memory care through a Montessori-based approach to dementia programming,” said Scott Herzig, Five Star’s Chief Operating Officer. “It focuses on leveraging the individual strengths and personal history of each resident to retain and build on existing skills. Our residents receive individualized attention, giving them the best chance at success and happiness for themselves, as well as their loved ones.”

The renovation, which is designed to maximize natural light via sky-lights, features fifteen modernized private and semi-private suites, large custom designed common areas, a world-class spa, family-style dining, and a beautifully landscaped secure outdoor garden with walking paths. Five Star anticipates construction to be completed in the first quarter of 2018.