JV Snags 28-Property Portfolio in Sunbelt Region

Acting on behalf of Carroll Multifamily Real Estate Fund V, Carroll Organization and PGIM Real Estate purchased the assets from affiliates of Lone Star Funds.

Alfonso Munk
Alfonso Munk, CIO, PGIM Real Estate

A joint venture between Carroll Organization and PGIM Real Estate has acquired a 28-property multifamily portfolio across Florida, Tennessee, North Carolina and Texas, from affiliates of Lone Star Funds. All of the acquired communities will be managed by Carroll Management Group. Carroll Organization acted on behalf of Carroll Multifamily Real Estate Fund V LP. 

“Apartment fundamentals in the portfolio’s markets remain strong, and we expect them to remain balanced over the long term, with strong demand offset by high levels of new supply,” Alfonso Munk, chief investment officer at PGIM Real Estate, told Multi-Housing News. “In addition, Class B apartment rent growth in these Sunbelt markets outperformed that of Class A apartments in four of the past five years, and the vacancy rate for Class B apartments has remained below that of Class A apartments since 2015.” 

The properties total 8,578 units and are currently 95 percent occupied as a whole. Located across six high-growth metropolitan markets, the partnership plans to use the communities’ strong-in-place cash flow to perform light value-add upgrades. 

“This investment is based on our belief that quality workforce housing is currently an underserved segment of the multifamily market, which has created a supply/demand imbalance in our country when homeownership or new-supply rents in desirable locations may not be attainable. Most of the assets in this portfolio are within close proximity to employment centers in major MSAs and offer rent levels that do not compete with new supply, which generally translate to higher rent,” said M. Patrick Carroll, chief executive officer of Carroll Organization.

In November, Carroll Organization closed the sale of ARIUM San Remo in Coral Springs, Fla. The company originally acquired the property in April 2014 as part of its Carroll Multifamily Real Estate Fund III LP. 

Image courtesy of PGIM Real Estate