Clarion, Blackfin Partner on $886M Portfolio Buy

3 min read

The 12 Sun Belt communities total more than 3,500 units.

Northlake by ARIUM. Image courtesy of CARROLL

Clarion Partners and Blackfin Real Estate Investors have acquired a portfolio of 12 multifamily properties with a total of 3,564 units from a joint venture between CARROLL and PGIM Real Estate for $885.5 million.

The communities were the remaining assets of a 28-property portfolio that the sellers acquired back in 2017. The portfolio is spread throughout six high-growth Sun Belt markets including Tampa, Orlando, and Melbourne, Fla., Charlotte and Wilmington, N.C., and Nashville, Tenn.

The properties sold were: Cape Harbor by ARIUM, Clear Run by ARIUM and Mill Creek by ARIUM in Wilmington; Mallard Creek by ARIUM, Northlake by ARIUM and Harris Pond by ARIUM in Charlotte; Williamsburg by ARIUM in Hendersonville, Tenn.; The Club by ARIUM in Antioch, Tenn.; Heron Lake by ARIUM and The Vinyards by ARIUM in Kissimmee, Fla.; Lake Pointe by ARIUM in Melbourne; and Bay Cove by ARIUM in Clearwater, Fla.

The communities are all Class B properties that were constructed between 1972 and 1995. The amenities throughout the properties include pools, fitness centers, and basketball and tennis courts.

At the time of the sale, CARROLL said each of the communities were operating with strong occupancy and healthy growth markets. During its four-year hold, CARROLL and PGIM Real Estate undertook numerous sustainability initiatives to add overall value to the assets. Initiatives included investments in LED lighting to reduce energy consumption by up to 75 percent; and an investment in water-saving devices including aerators, low-flow toilets and eco-friendly irrigation systems, which saved more than 50 million gallons of water each year; and trash diversion and recycling efforts.

Light value-add improvements in the apartments included adding plank flooring on ground-floor units and installing washers/dryers in all units with connections. The portfolio’s current occupancy rate is 95.4 percent.

Jim Mehalso led the portfolio transaction for PGIM Real Estate. Easley Hooff, vice president of investments led the CARROLL team in the transaction. The Eastdil Secured investment sales team facilitated the transaction. DLA Piper served as legal counsel for Clarion Partners.

TEAMING UP FOR THE THIRD TIME

Now, Clarion and Blackfin will be continuing the business plan for the 12-property portfolio that includes upgrading both unit interiors and community amenities. According to Clarion, the units will be improved with new vinyl floors, appliances, countertops, LED lights and other features.

Thomas James, managing director for Clarion, said in prepared remarks that the company was able to acquire this portfolio at below replacement cost and will be able to renovate for improved yield. Clarion and Blackfin also tapped Greystar to serve as the property manager for the six assets in Florida and Tennessee, while Drucker & Falk will manage the six properties in North Carolina.

Doug Root, co-founder & managing partner for Blackfin, said in prepared remarks that this portfolio acquisition is the third time the two companies have worked together in the last 12 months. Last year, Clarion and Blackfin acquired a 242-unit mid-rise multifamily community in Largo, Md., near Washington, D.C. A month prior in May 2021, the two companies also acquired a 444-unit community in the D.C. metro area in Manassas, Va., for $113 million.

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