S2 Capital Acquires 768 Units in Two DFW Deals

These were the investment manager’s first deals of the year.

Silverbrook has 642 apartments and is located in Grand Prairie, Texas. Image courtesy of S2 Capital

After taking a break from acquisitions thus far in 2023, a decision fueled by the volatility roiling the capital markets, investment manager S2 Capital has made its first two acquisitions of the year in the Dallas-Fort Worth metro.

The Dallas-based firm declined to disclose how much the assets – 126-unit Falltree in Mesquite, Texas, and 642-unit Silverbrook in neighboring Grand Prairie, Texas – went for, as well as the identity of the seller, though Multi-Housing News had previously reported the owner of Silverbrook as BH Management Services, a subsidiary of BH Equities. Falltree’s previous owner could not immediately be identified.

Falltree comprises 126 units and is located in Mesquite, Texas. Image courtesy of S2 Capital

Ryan Everett, vice president of acquisitions at S2 Capital, said in a prepared statement the firm has been patient in 2023, taking pricing and capital markets considerations under advisement and refraining to join the M&A market until now.

The DFW deals transacted at a basis that felt compelling to the firm’s investors, said Evertt, who noted that the assets are in markets the company knows extremely well. The properties are located within a few miles of other multifamily assets owned by S2. CBRE’s Danny Baker and William Hubbard represented the sellers, while Harry Krieger, also of CBRE, secured financing for S2.

Value-add plans

Located at 2934 Alouette Drive in Grand Prairie, Silverbrook was built in 1982 and offers one-, two- and three-bedroom apartments ranging in size from 600 to 1,150 square feet. S2 plans to renovate the units, adding stainless steel appliances, granite countertops, upgraded fixtures and new flooring, tile and paint. Exterior amenity upgrades will include a reimagined community clubhouse and a tennis court that will be repurposed as pickleball courts. Other exterior plans call for new paint and balcony decking, a dog park and swimming pool area that will be surrounded by grill stations and pergolas.

The property is located near a 172-acre entertainment district called Epic Center and is close to several retail centers, including Arkansas Crossing and Arkansas Court Shopping Center. Residents can reach Dallas and Fort Worth via Interstate 30. Dallas-Fort Worth International Airport is less than 16 miles from Silverbrook, while Dallas Love Field is about 24 miles away.

Falltree, located at 19200 Lyndon B. Johnson Freeway in Mesquite, offers studios and one- and two-bedroom residences ranging in size from 500 to 1,060 square feet. S2 plans to reposition Falltree, which was built in 1983. Plans for upgrades include adding stainless steel appliances, upgraded cabinetry, tile backsplashes, granite countertops, wood-style flooring and contemporary fixtures. Upgraded exterior amenity upgrades will include a renovated clubhouse, swimming pools, added balcony and patio enclosures and fresh paint and new landscaping.

The property offers convenient access to the I-30 and I-635 corridors, while the White Rock DART station is less than 10 miles from Falltree. The community is about 16.5 miles from Dallas Love Field and 34 miles from DFW airport.

Earlier S2 deals

S2 has made more than $500 million worth of upgrades and renovations to its properties, which are mostly located in the Sunbelt. In July 2022, S2 acquired 14 properties totaling 4,455 units the Dallas-Fort Worth and Houston metros. S2 planned to invest about $60 million in renovations to the assets, which were built between 1979 and 1987. S2 acquired two multifamily properties totaling 1,358 units in the Dallas-Fort Worth metro in July 2021 – the 522-unit Verandas at Timberglen in Dallas and the 836-unit Harwood in the Fort Worth suburb of North Richland Hills. A month earlier, S2 purchased Lincoln Park at Trinity Bluff, a 369-unit property in downtown Fort Worth.

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