JV Nabs $34M Southeast Portfolio

Blue Magma Residential and NCP Enterprise Funds have acquired three communities in Covington, Ga.; Robinsonville, Miss.; and Dothan, Ala.
Orchard Cove
Orchard Cove

A joint venture of Tampa-based Blue Magma Residential LLC and New York-based NCP Enterprise Funds has acquired a portfolio of three apartment communities in the Southeast U.S. The purchase price was $34 million. Ladder Capital provided debt financing for the purchase, which was brokered by Cushman & Wakefield Atlanta. Blue Magma Residential is a real estate management company that through its affiliates co-owns and manages more than 9,000 apartment units in Florida, Georgia, Alabama and Mississippi.

The acquired portfolio consists of three prime value-add assets totaling 604 units and 565,282 square feet. They are in Covington, Ga., an Atlanta suburb; Robinsonville, Miss.; and Dothan, Ala. At closing, the three properties collectively enjoyed 97 percent occupancy.

The 188-unit Orchard Cove in Covington, purchased for $15.2 million, will be rebranded and marketed as The Park at Arlington.

Gardens of Canal, a 232-unit community in Robinsonville, near the Memphis-area casino town of Tunica, Miss., was acquired for $11.6 million. It will be rebranded as The Park at Brighton. The 184-unit Madison Square in Dothan was purchased for $7.8 million and will be rechristened as The Park at Ashburn.

Vote of confidence

The biggest challenge was to convince lenders of the upside of these deals, [involving properties] located in tertiary markets,” Blue Magma Residential founding partner Reuven Oded told MHN. “We went with Ladder Capital, [which] knows us well and has confidence in our management and repositioning abilities. We have done so numerous times.”

Added Peter Auerbach, NCP Enterprise Funds co-founder and CIO, “This opportunity aligns perfectly with one of our core principles: generate cash-flow to investors while making improvements to the physical assets. We gravitate toward transactions where there is common-sense work to be done that does not rely on arbitrary exits or financial engineering. We are extremely impressed with the entire team and Blue Magma in particular, and are looking forward to working hard for our collective investors on this key portfolio. Most importantly, we feel that everybody wins in situations such as these. When people have a nice place to live that is affordable, they often feel better about themselves, have more comfort, and have some peace at the end of the day to spend with family and loved ones. Investing in such endeavors with people like Reuven Oded and his team enable us to live up to one of our internal mottos: ‘Do well by doing good.'”