Sule Aygoren Carranza is managing editor of Real Estate Forum and editor of Multi Housing forum, from which this article is excerpted.

Washington, DC—A joint venture of Federal Capital Partners and New York City-based real estate investment fund Angelo, Gordon & Co. sold and recapitalized a five-property portfolio valued at $405 million. Lacey I. Rice, a partner with locally based Federal Capital, says the communities represent about 35% to 40% of the firm's multifamily holdings and exemplify its business strategy.

"As opportunistic, value-add investors in the Baltimore-Washington, DC area, we try to purchase class B and class C properties that are under-managed or undercapitalized," Rice explains. "Our goal is to aggressively transform the physical condition of the property, the management and its image in the market. We typically try to find properties that are in improving submarkets. Fortunately, in this market, there are a number of areas that are going through favorable transformations. And we frequently play an active role with county and community organizations in efforts to accelerate the renaissance of specific submarkets."

The properties were in Federal Capital's portfolio the past two to four years. Rice tells Multi Housing Forum the firm was initially considering a sale of all five assets, but determined it still had the opportunity to add value through additional renovations on two of the communities. "We were fortunate enough to find an institutional investor that shared our vision for the properties and was interested in participating in a joint venture structure," he says. "We're going to continue our program of unit renovations and common area improvements, and look into maybe trying to improve their position in their respective submarkets."While he would not disclose the identity of the new equity partner on those two assets, he did say it was an overseas financial institution.