DEAL OF THE DAY: Raintree Acquires Two-Property Portfolio for $65M

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Carlsbad and Rancho Peñasquitos, Calif.,--Raintree Partners completed the acquisition of a two-property, multifamily portfolio for $65 million.

Carlsbad and Rancho Peñasquitos, Calif., – Raintree Partners completed the acquisition of a two-property, multifamily portfolio for $65 million.

The asset was purchased from a private individual, according to Jeff Allen, CEO of Raintree Partners. The multifamily properties are located in the cities of Carlsbad and Rancho Peñasquitos, Calif., both within San Diego County. The acquisition effectively raises Raintree’s market stake to $130 million in recent acquisitions.

“Each property in this portfolio is located in a very desirable area of San Diego County,” says Allen. “The properties, which combined consist of 260 units, are representative of our multifamily investment strategy. They are well located, have strong occupancy rates of 99 percent and 95 percent respectively, and have the potential for attractive long term growth in the return on our investment as the economy improves.”

The two properties, Flower Fields Apartments in Carlsbad, and Canyon Hills Apartments in Rancho Peñasquitos, were purchased with 10-year fixed loans totaling $42.6 million, with a blended interest rate of 4.19 percent. Financing was provided by Freddie Mac and arranged by Mitch Thurston and Andy Ahlers of Berkadia Commercial Mortgage.

According to Jason Check, Raintree’s development director, who spent nearly one year negotiating directly with the former owner, and original developer, of the properties, “We stayed on top of the opportunity when the seller acknowledged he planned to potentially list his property for sale early this year. Ultimately we were at the right place, with the right offer, at the right time, and our involvement alleviated the seller of the effort to put the properties through a formal marketing process.”

Flower Fields Apartments is a 132‐unit multifamily property consisting of 19 buildings located at 2666 Flower Fields Way in Carlsbad, Calif. It was purchased for $31.5 million. The property has one- and two-bedroom units and has been well maintained by the original owner. The property is three miles from downtown Carlsbad, which contains an array of shops, restaurants and beaches, an attractive draw for tenants.

Canyon Hills Apartments is a 128‐unit multifamily property consisting of 17 buildings located at 9870 Mercy Road in Rancho Peñasquitos, Calif. It was purchased for $33.5 million. The property consists of two- and three-bedroom units, and like sister property Flower Fields, Canyon Hills also has been well maintained by the original owner. In addition, each unit in Canyon Hills has its own washer and dryer, fireplace, central air conditioning and heating, and garage. The property is located five miles north of Miramar Marine Corps Air Station and 20 miles north of downtown San Diego.

“With the closing of these deals, in addition to the Trieste Apartments acquisition we closed about a month ago, we are now positioned with $130 million of multifamily properties in some of San Diego’s strongest submarkets, including University Towne Center in La Jolla, Carlsbad, and Rancho Penasquitos,” says Raintree’s director of acquisitions, Aaron Hancock. “Our portfolio of apartment communities has grown to 9 properties over the past 18 months, and we are excited about our prospects for continuing to acquire attractive multifamily investment opportunities in California.”

Raintree Partners, formed by. Allen in December of 2007, is a private real estate investment company whose objective is to pursue multifamily acquisition, development and redevelopment opportunities in west coast markets. Raintree invests through a partnership with a major institutional investment management company which committed $200 million of equity capital to the venture.

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