ROSEVILLE, CA-Los Angeles-based JRK Property Holdings has acquired the 273-unit Terraces at Highland Reserve at 700 Gibson Dr. in this Sacramento suburb via its JRK Multifamily Platform, an institutional fund with over $1 billion in purchasing capacity. Bobby Lee, president of JRK’s investment division, tells GlobeSt.com that the acquisition—one of two properties that JRK has closed on lately—was part of the company’s plan to grow its presence in California as well as other US markets.
JRK did not disclose individual prices for the Terraces at Highland or its other acquisition, which was in Houston, but the company said it paid $80 million combined for the two properties in two separate deals, at cap rates of roughly 6%. It financed them with new Fannie Mae loans originated by Northmarq and AmeriSphere, plus a $20 million equity investment from JRK Multifamily Platform.
“We wanted to get into the California market with some high-quality assets, and this property is in a very nice part of Roseville,” Lee says. He says the property holds upside in raising rents, which are below market, and also in additional upside that JRK can create with a light property upgrade.
JRK acquired the Terraces at Highland from a private REIT in a transaction that was brokered by Seth Siegel at Cushman & Wakefield, who represented the seller. Built in 2002, the property comprises 34 buildings, with 64 one-bedroom, 129 two-bedroom and 80 three-bedroom units. It was 96% occupied at the time of the sale.
Northmarq and AmeriSphere jointly originated the loan on the Terraces at Highland and also on the Houston property, called Broadstone West 18th. Its bankers were Greg Duvall at Northmarq and Scott Suttle at AmeriSphere.
One of the keys to winning both the Roseville and Houston deals was JRK’s “ability to move quickly and provide certainty to sellers in a dynamic macro-economic environment,” according to Lee. In today’s volatile financing environment, Lee says, “It’s tough for some private buyers to line up financing” quickly or reliably enough to move swiftly. “JRK was awarded these properties because we were willing to commit to due diligence timeframes of less than one week,” he says.
The two transactions bring JRK’s total acquisitions to 2,400 units since May. As reported previously on GlobeSt.com, its $250 million multifamily equity fund is targeting $1 billion worth of acquisitions.
Jim Lippman, JRK’s chairman and CEO, said he expects to achieve the company’s goal of investing the balance of its multifamily fund by the end of 2012. “I continue to believe that now is an excellent time to acquire well-located, high-quality multifamily properties,” Lippman said in an announcement regarding the two deals. “If opportunities continue to exist beyond 2012, JRK is extremely well positioned to raise additional equity to invest in multifamily assets.”
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