TruAmerica Buys M-F Portfolio in Colorado, Washington for $229M
- Jul 11, 2014
TruAmerica Multifamily continues building its West Coast apartment holdings with the $229 million acquisition of a 1,514-unit portfolio in Colorado and Washington from Berkshire Group.
CBRE Capital Markets represented Berkshire Group, a Boston-based firm that acquires and manages apartment communities and property-related companies for institutional investors, and the CBRE Capital Markets’ Debt & Structured Finance team secured a $168.8 million loan for the acquisition.
Brian Eisendrath of CBRE’s Los Angles office arranged the financing for TruAmerica, a privately held real estate investment firm founded a year ago by CRE veteran Robert Hart and The Guardian Life Insurance Co. of America.
“We are pleased to source aggressive capital for TruAmerica and help them deliver attractive returns to their investors,” Eisendrath said in a news release.
The properties in the transaction included two in Colorado: Berkshires at Lowery in Denver and Ponderosa Villas in Aurora, Colo. CBRE arranged a seven-year, fixed-rate, full-term interest- only loan for the Denver property and a five-year, fixed-rate, full-term interest-only loan for the Aurora complex. A five-year, fixed-rate, full-term interest-only loan was also secured to acquire Carriages at Fairwood Downs in Renton, Wash.
TruAmerica and its partners plan to spend $25 million to $30 million renovating the apartment buildings, which were constructed in the 1970s and 1980s, according to the release.
“This was a complex transaction with many moving pieces. We are extremely satisfied with the team’s ability to overcome hurdles and exceed the terms quoted at application,” Noah Hochman, the TruAmerica director of acquisitions, said in the release.
The sale was led by Kevin Geiger and Malcolm McComb of CBRE Capital Markets’ Institutional Properties, Multifamily team in Atlanta, who negotiated on behalf of Berkshire Group. Dan Woodward, David Potarf and Matt Barnett of CBRE’s Denver office assisted in the Colorado transactions while Jon Hallgrimson, Eli Hanacek and Frank Bosl of CBRE’s Seattle office worked on the Washington deal.
“The combined effort of our multi-family professionals across two markets and our Debt & Structured Finance team to successfully complete this complex transaction shows the true power of collaboration,” Geiger said in the release.
TruAmerica has been active in recent months, particularly in the Seattle area. Late last month, the Los Angeles-based firm picked up Montclair Heights, a 174-unit complex also in Renton, for $28.7 million. In March, TruAmerica acquired Westhaven Apartments in Seattle, a 190-unit property. Launched in July 2013, the joint venture between Hart and Guardian is on track to reach its goal of building a $1 billion apartment portfolio by June 2015. The firm focuses on acquiring, rehabilitating and managing Class B or better multi-family properties on the West Coast.
With tech employment booming in Seattle, young workers are flocking to the region, increasing the need for apartments and boosting investor demand.
“Properties with value-add potential are highly sought after, many receiving multiple offers above the list price,” according to a first quarter 2014 market report by Marcus & Millichap.
The economy is also growing in the Denver area, “generating heightened apartment demand and elevated construction,” noted a Marcus & Millichap market report for the second quarter 2014.
“Rents will continue their upward trend this year, rising to new highs,” the Denver Marcus & Millichap reported added.