CT Realty Forms JV for Apartment Acquisitions
- Jan 24, 2008
With a tight market for apartments in Southern California, CT Realty Corp. and Macbeth Apartment Systems Inc. have created a joint venture program to pursue multi-family acquisitions in that region. With echo boomer demographics, foreign immigration and limits on new supply, indicators point to a strong outlook for apartments in the next five years, according to the 2008 National Apartment Report prepared by Marcus & Millichap Real Estate Investment Research. Apartment properties in Los Angeles are expected to record strong performance in 2008 due to tight operating conditions and low housing affordability and the apartment market in San Diego is expected to continue to post modest improvement this year, supported by steady job growth, high home prices and limited new supply, according to the report. CT Realty plans to re-establish its presence in the multi-family market in Southern California as a result of the new agreement with Macbeth. The new agreement is structured as an equal partnership between CT Realty and Macbeth. CT Realty will provide equity financing as well as strategic planning for the acquisition of multi-family properties, while Macbeth will handle construction oversight, marketing and day-to-day management operations. CT Realty will use funds from its California Fund V and its new California Fund VI to acquire multi-family properties in San Diego, Orange, Riverside, San Bernardino and Los Angeles counties. CT Realty previously owned approximately 6,000 apartments which were renovated and then sold over the last several years. Recently, CT Realty has focused on redevelopment of office, industrial and self-storage investments as well as other real estate products. Macbeth Apartment Systems has worked with CT Realty as a third-party consultant for several years providing construction management, market repositioning and management services for CT’s multi-family properties. Established in 1987 in San Diego, Macbeth Apartment Systems currently manages approximately 9,000 apartment units for other companies, as well as 1,100 units for its own portfolio. The total value of multi-family assets under management is $1 billion. The joint venture is actively seeking value-added apartment communities throughout the region. Apartments that were converted to condominiums but did not completely sell represent one source of new product for CT/Macbeth. Other sources of apartment product will be real estate owned properties held by banks that need to dispose of their real estate assets. In addition, CT Realty/Macbeth will work with apartment and land brokers, consultants to the real estate development industry including engineers, architects, accounting firms and general contractors, as well as other developers interested in partnering on multi-family acquisitions. Since its establishment in 1994, Newport Beach, Calif.,-based CT Realty Corp. has completed more than 140 transactions totaling more than $2 billion, which includes acquisitions, sales, development and redevelopment. Carlsbad, Calif.,-based Macbeth Apartment Systems specializes in managing apartment communities and has experience in value-added apartment renovation and condo conversion.