Abacus, QVT Flip Property, Gain Profit

Acquire an asset, hold it for a year or so and then sell at a sizable profit. Sounds like a 2007 transaction outcome, and apparently it is for Abacus Capital Group and QVT Mount Auburn Capital L.P. The multi-family investment advisor and the real estate private equity fund recently sold the Enclave at Adobe Creek apartment community in Petaluma, Calif., for $68 million after having bought the property for $52 million in October 2009.

February 18, 2011
By Barbra Murray, Contributing Editor

Acquire an asset, hold it for a year or so and then sell at a sizable profit. Sounds like a 2007 transaction outcome, and apparently, it is for Abacus Capital Group and QVT Mount Auburn Capital L.P. The multi-family investment advisor and the real estate private equity fund recently sold the Enclave at Adobe Creek apartment community in Petaluma, Calif., for $68 million, after having bought the 492-residence property for $52 million in October 2009. One million per month. Not too shabby.

Well, the profit was more like $14 million, as Abacus invested $2 million to upgrade and re-brand the Enclave, which had been known as Lakeville Resort. Abacus executive vice president Greg Lyden noted that the property needed repositioning both physicaly and operationally. Institutional Property Advisors orchestrated the sale on the sellers’ behalf.

Located in Sonoma County’s wine country, the Enclave sits just a half hour from the Golden Gate Bridge. The entire Northern California apartment market is faring better than the national apartment market, with an average vacancy rate of just 4.7 percent, according to a fourth quarter report by real estate services firm Cassidy Turley. In Sonoma County, the vacancy rate for rental properties featuring 100 or more units is 5 percent.