ZMR Wraps $230M Portfolio Recap

ZMR Capital has completed the recapitalization of a six-property, 1,600-unit Sun Belt portfolio with $230 million in joint venture equity from Slate Asset Management and debt financing featuring a five-year, fixed-rate $169 million loan from Fannie Mae. The portfolio comprises three apartment communities in Florida, two in Georgia and one in Arizona.

Slate Asset Management, a Chicago-based global investment and asset management firm, announced last month it had agreed to purchase the portfolio of garden-style apartment properties.

Newmark Director Ricky Warner arranged the recapitalization transaction on behalf of Slate and ZMR with Executive Managing Directors Henry Stimler, Bill Weber and Matt Mense and Associate Nicholas Matzorkis. King & Spalding advised Slate on the transaction.

Newmark stated that the portfolio had originally been planned for sale but was re-evaluated with Newmark’s guidance. The result was a capital restructuring that extended ZMR’s business plan, introduced Slate as a long-term institutional partner and injected fresh equity to support a five-year hold strategy. The deal enhances ownership’s flexibility amid shifting market conditions, according to Newmark. ZMR, which will continue to manage the properties, plans to make renovations and operational upgrades.

This is ZMR’s tenth transaction in the past year, totaling $600 million in recapitalizations and $100 million in refinancing. Slate described the portfolio as well-occupied, with long-term growth potential through mark-to-market rent increases. The firm also noted the properties are concentrated in and around the growing Tampa, Atlanta and Phoenix MSAs near essential services like grocery stores and other service providers.

Peter Tsoulogiannis, partner and Chief Investment Officer at Slate, said in a prepared statement the firm believes the multifamily sector will benefit from the undersupply of new housing combined with the increasing demand for rental options. Its strategy is to focus on acquiring assets at below replacement cost with below market in-place rents to generate cash flow growth.

Inside the portfolio

The portfolio comprises properties in three states:

• Upland Townhomes, a 348-unit property at 6850 Mableton Parkway in Mableton, Ga. ZMR acquired the property in July 2021 from The Walden Group for $40.1 million. Built in 1970, the property has 24 two-story buildings with one-, two- and three-story floorplans.
• Hanley Place Apartments, a 400-unit community at 7315 W. Hanna Ave. in Tampa. ZMR acquired the asset in August 2021 from NorthEnd Equities for $65 million. Built in 1972, Hanley Place encompasses 15 two- and three-story buildings with one- to three-bedroom apartments ranging in size between 712 and 1,300 square feet.
• The Flats, a 112-unit multifamily property at 1045 S. San Jose St. in Mesa, Ariz. ZMR acquired the property, then known as District Flats Off Dobson Apartments, in May 2021 from Rise48 Equity for $18.2 million. Multi-Housing News reported at the time that The Souferian Group partnered with ZMR on the purchase. Built in 1975, the property features studios, one- and two-bedroom floorplans.
• Park at Peachtree Hills, a 118-unit property at 480 Peachtree Hills Ave., Atlanta. ZMR acquired the asset in the city’s Buckhead section in December 2019.
• Skye Oaks, a 285-unit community at 110 Summerfield Way in Brandon, Fla. ZMR acquired the property in December 2021. Built in 1974, it has 23 two-story buildings with one-, two- and three-story floorplans.
• The Boardwalk Apartments, a 338-community formerly known as Park Place Apartments, at 4637 Deleon St. in Fort Myers, Fla. ZMR acquired the asset for $44.5 million in June 2021 from NorthEnd Equities. It was the firm’s first purchase in Fort Myers. The property has a mix of studios, one-, two- and three-bedroom floorplans.