CRA Purchases Louisville Multi-Family Portfolio for $97M
- Jan 06, 2012
January 6, 2012
By Barbra Murray, Contributing Editor
Continental Realty Advisors is keen on Kentucky, as evidenced by its recent purchase of a 1,200-residence apartment portfolio in Louisville. The multi-family housing owner and institutional fund manager acquired the group of four assets from Camden Property Trust for $97 million.
Among the properties in the portfolio is Brookside Apartment Homes, a 224-unit residential community that first opened its doors in 1987, and Meadows Apartment Homes, which reached completion in 1990 with 400 residences. Completing the group are the 12-year-old Oxmoor Apartment Homes, featuring 432 units, and the 138-unit Prospect Park Apartment Homes, built in 1990. All four properties are now part of the CRA’s CRA-B1 Investment Fund. “Since we can close quickly on large-scale multi-family portfolio deals on an all-cash or loan-assumption basis, the Louisville portfolio fit nicely in our investment strategy,” David Snyder, chairman of CRA, said.
Louisville has long been on CRA’s radar. CRA-B1 made its debut in the market in 2007 with the $19.6 million acquisition of the 272-unit Park Laureate Apartments, followed closely by the $17 million purchase of the 256-unit Canter Chase Apartments. In 2010, CRA bought Jamestown at St. Matthews, a 355-unit property, for $25 million.
The forecast for the rental market in Louisville is sunny. With a growing gap between supply and demand, the average apartment vacancy rate in the city is on track to drop to 4.2 percent in 2012, according to a report by national multi-family investment banking company Hendricks & Partners Inc.
For CRA, the portfolio purchase marks a major commitment to Louisville, but for Camden, the deal is indicative of a different strategy. With the disposition of the assets, Camden bids adieu to Kentucky–but not the South. “Based on Camden’s operating results in the third quarter for Houston, Dallas, Austin and Charlotte, the south is definitely rocking again,” Richard J. Campo, Camden CEO, noted during the company’s third quarter earnings call. The company’s focus extends west, as well; Camden is looking to increase its presence in Sin City.
“Year-over-year numbers are all pointing upwards for Las Vegas,” Campo said. “Air traffic is up 8.7 percent. Convention attendance is up 19.6 percent. Hotel occupancy is up 2.1 percent. Average room rates are up 11.1 percent. With virtually no new supply on the horizon, all of these metrics point to a better market in the next few quarters and next year.”
The timing, he explained, is just right. “I think Las Vegas is a great opportunity for us next year to accelerate growth as the market improves,” Campo added. “Our team in the field and the support teams, and corporate teams at the regional office, the corporate office are prepared to step up and end the year strong, I’m sure.”
And Camden has other ideas. Phoenix made the company’s list of its top performing markets in the third quarter. Of course, there is competition among investors in the market. CRA has an eye on the southwestern city, too. The fund manager shelled out $45 million in cash for the 629-unit Canyons Luxury Apartment Community in 2010.