RREAF-Led JV Seals $534M Deal
- Sep 22, 2021
Dallas-based RREAF Holdings LLC and partners DLP Capital and 3650 REIT have acquired a 13-asset multifamily portfolio with more than 2,000 units in the Sun Belt. The acquisition is the first tranche of a three-phase transaction encompassing 21 multifamily communities and more than 4,000 units, for $534 million.
The next round of closings is slated for early October, when six properties will be acquired, and early November, when the final two properties will be purchased.
Kip Sowden, RREAF CEO, said the deal, when completed, will be one of the largest real estate transactions in the country since the onset of the pandemic. The company has acquired about $1 billion of real estate assets in the last 12 months.
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RREAF, a private real estate and development firm, is the sponsor; DLP Capital, a private real estate investment and financial services company, is an equity investor and will manage several of the assets. The two companies have partnered on previous deals. 3650 REIT, a nationwide commercial real estate firm that originates and services portfolio loans for relationship borrowers, has a preferred equity position. RREAF will manage the majority of the assets.
Berkadia arranged the Freddie Mac financing for the entire transaction. Taylor Bird, Andrew Brown and Jaime Slocumb of Cushman & Wakefield represented the seller in the first transaction, Carter Funds. The sellers of the remaining two tranches remained undisclosed.
Nathan Stone, managing director at Berkadia, said in a prepared statement that the firm began working with RREAF on the portfolio and explored all financing avenues available including SASBY executions and structured products from many of the largest investment banks in the space. Stone said Freddie Mac emerged as the ideal partner for the transaction. Upon the closing of the portfolio, Berkadia will have closed 34 loans with RREAF in a 14-month period with loan balances totaling more than $647 million.
Cushman & Wakefield also has worked with RREAF in the past, closing 26 deals with RREAF on both the buyer and seller sides.
RREAF is beginning to make significant capital improvements across the portfolio, described as affordable workforce housing, as part of its strategic value-add business plan.
The 13 properties closed in the first transaction are located in Georgia, Alabama and Louisiana. The remaining properties include assets in Florida, North Carolina, Arkansas and Texas.
Properties in the first closing include Ascend at Savannah, Ascend Midtown, Carriage House Apartment Homes and Ridgewood, all in Savannah, Ga. The remaining properties in the first tranche are: Azure Cove Apartment Homes, The Arbors Apartment Homes and Kessler Point Apartment Homes, all three in Garden City, Ga.; Park Place in Foley, Ala.; Summer Trace Apartments in Gulf Shores, Ala.; Windscape Apartments in Daphne, Ala.; Pelican Pointe in Slidell, La.; and Falls at Spring Creek and Legacy at River Crossing, both in Macon, Ga.
In December, RREAF bought, an 11-property, 2,600-unit portfolio of apartment communities from REIT BSR for an undisclosed amount. The portfolio’s properties were located in Houston; Little Rock, Ark., and Beaumont, Texas.
Also in December, 3650 REIT originated a $60.3 million non-resource construction loan for Cymbal Development to build Oasis Pointe, an eight-story, luxury mixed-use property in Dania Beach, Fla.
In March, DLP acquired more than 1,000 units of workforce housing in four communities in Mississippi and Alabama for an undisclosed amount. It was one of the largest transactions ever completed in the markets.