TruAmerica Apartment Buy Tops the Charts

TruAmerica has netted the largest Southern California multi-family asset acquisition in almost 20 years.

Canyon Crest, Santa Clarita

Keith Loria, Contributing Editor

TruAmerica Multifamily has teamed with a syndicate of domestic and international institutional investors, including The Guardian Life Insurance Co. of America and Allstate, to acquire a 14-property multi-family portfolio in Southern California for $482 million from JH Real Estate Partners, Inc.

The deal is the largest Southern California multi-family asset acquisition in almost 20 years.

“Assembling a size of this portfolio all at once are rare opportunities,” Mark Enfield, TruAmerica’s chief administrative officer, told Commercial Property Executive. “Its off-market nature was appealing—we had a relationship with the seller—and we saw it as a tremendous value-add opportunity.”

The portfolio totals 2,669 units and is comprised largely of 1980s vintage Class B apartment communities in Los Angeles County, San Diego County and the Inland Empire.

“We’re bullish on Southern California markets, which has not seen the rent growth that some other California markets have seen, and the rent growth projections for the submarkets these properties are in are certainly favorable at about 5-plus percent across the board,” Enfield added.

TruAmerica will immediately set forth a $40 million renovation plan, which will include targeted property-specific exterior and interior unit upgrades, and community amenities, including enhanced pool areas, leasing offices, fitness centers and landscaping. Individual units will also be renovated with improved countertops, appliances, cabinets, flooring and light fixtures.

According to Enfield, the transaction fits in well with the company’s strategy to acquire and improve the operating performance of well-located mid-tier assets in primary Western U.S. markets and transform them into affordable, higher-quality workforce housing.

“Our renters are renters by choice in urban markets that typically have high occupancy rates; many with high barriers to entry,” he concluded. “We feel these assets fit right in that workforce housing with significant value-add opportunities.”

The acquisition was leveraged with a $354 million FannieMae Credit Facility from Berkeley Point Capital.

TruAmerica has been one of the country’s most active multi-family investors and manages a $3 billion portfolio of nearly 16,000 units across prime locations throughout Northern and Southern California, Colorado, Arizona and Washington.