JRK Pays $100M for 2 Communities
In the past month the company has completed three acquisitions out of its Platform 5 Fund.
JRK Property Holdings, through its JRK Platform 5 Fund, has acquired two Class-A multifamily communities in Minneapolis and San Francisco for nearly $100 million.
In separate transactions, the first community purchased by JRK is Woodbury Park, a 224-unit townhome community in Woodbury, Minn. Located at 2150 Vining Dr., 10 miles east of downtown Minneapolis, Woodbury Park was delivered in 1999 and sits on 15.1 acres of land. At closing, it was more than 99 percent occupied.
Woodbury is home to a top-rated school district. Fortune Magazine recognized Woodbury as one of the top 14 Best Places to Live in the US in 2022.
The other acquisition is 333 Fremont, a high-rise community in San Francisco. Delivered in 2014, it was originally condominiums. At close, occupancy was 95 percent. The eight-story tower is in the East Cut neighborhood, one of the city’s newer neighborhoods near SOMA, South Park, the Financial District and the Embarcadero.
“We’ve seen seller capitulation on pricing expectations at higher cap rates, which are at attractive levels now, but it had been difficult to deploy capital because of the capital markets and lower cash on cash returns,” JRK President Daniel Lippman told Multi-Housing News. “The recent US Treasury movement has allowed for both attractive going-in yields and cash flow.”
As for its investment scope, Lippman said JRK is location-agnostic and will target the best risk-adjusted returns at any given time. “We deploy across all vintage and product types, so it allows us to be opportunistic,” he said.
CBRE’s Keith Collins, Abe Appert and Ted Abramson marketed Woodbury Park while Institutional Property Advisors’ Philip Saglimbeni, Stanford Jones, and Alexander Tartaglia marketed 333 Fremont.
Finding significant repositioning upside
The purchase marks the company’s third apartment community acquired in the past month. Most recently JRK acquired Brook on Janes Apartments, a 288-unit multifamily community in the greater Chicagoland area.
Lippman noted that his firm intends to be aggressive buyers over the next 12 to 18 months and invest another $1.5 billion to $2 billion.
The JRK Platform 5 Fund is a $1 billion multifamily value-add and core plus fund targeting well-situated multifamily investments completed after 1990. Since its closing in October 2022, the fund has been 20 percent invested.
Lippman noted the actions don’t reflect rushing in to spend. He said JRK takes the approach of deploying its funds across years to diversify, so while it has been a buyer through the past several years, he sees this as a good opportunity for buying.
