TALLAHASEE-In its latest in a string of acquisitions, Lynd has purchased an $80 million portfolio of distressed student housing in Tallahassee. The deal includes seven distressed notes and two bank-owned properties.
Lynd purchased the portfolio from LNR Property, LLC, a diversified real estate investment, financing and management company in South Florida. Lynd was one of several real estate investors bidding on the property. The purchase price was not disclosed. The properties were listed and marketed by Holliday Fenoglio Fowler’s New York office. Joe Morningstar was the listing broker.
“We like the student housing sector and we’ve been very active in the space buying distressed notes,” David Lynd, COO of Lynd, tells GlobeSt.com. “If you look at the demographics behind student housing, it’s somewhat recession proof. People will go into debt to pay their rent through student loans.”
The Tallahassee portfolio includes nine student apartment buildings totaling 1.756 million square feet, 1,785 units and 4,255 beds. Two thirds of product was built between 1999 and 2004. All of the buildings are located close to the Florida State University campus as well as several other colleges in the area. Tallahassee is home to nearly 65,000 college students.
“This was a good portfolio that matched up with us really well and we were able to move quickly to get it closed,” Lynd says. “It was an overleveraged deal that at the end of the day had the operational issues or ownership.”
Lynd has already started tenant improvements on the two REO properties it has taken title to. It will take title on the remaining properties as each is disposed of in the court system.
Although there was competition for the portfolio, Lynd says the firm’s ability to write a check on the spot was a big edge against other investors. According to Lynd, the firm is flush with equity and actively seeking deals with property owners looking to divest troubled assets. Indeed, over the past two months, Lynd has acquired $161 million in distressed assets including a major bulk purchase of $62 million worth of notes on 14 commercial properties back in February.
With this purchase, Lynd has increased its national multifamily unit count to 36,000. It now manages 2,000 units in three Florida markets including Miami, Tampa and Tallahassee. But Lynd is not done yet. Lynd says the firm is in talks to acquire three more pools of properties, as well as some distressed development opportunities.
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