LOS ANGELES—TruAmerica Multifamily has secured a 14-property multifamily portfolio from JH Real Estate Partners for $481 million. The 2,666-unit portfolio has properties that are located in markets throughout Southern California, namely Los Angeles, San Diego and the Inland Empire.

“The seller saw this as a good time in the market to sell. He wanted to get out of the business, and he is planning on going into retail. It is a little bit of an anomaly, but there are better returns in other markets. When you are able to sell at a 5% cap rate and buy at a 7% cap rate, the economics just work better,” Jim Fisher, a principal with Lee & Associates, tells GlobeSt.com. Fisher represented the seller in the transaction, along with Mike Smith, a fellow principal with Lee & Associates.

The properties are class-B assets, and range in size from 60 units to 384 units. TruAmerica Multifamily targets value-add properties in primary West Coast markets, and these properties fit that bill. The investor plans to pump an additional $40 million of capital to upgrade the properties over the next two years, which will include both exterior and interior unit upgrades. This includes new or enhanced pool areas, leasing offices, fitness centers and landscaping, as well as new countertops, appliances, cabinets, flooring and light fixtures in the interior units. According to Bob Hart, TruAmerica founder and CEO, class-B assets are expected to rise 5% in value over the next year, which positions this portfolio for tremendous value-add upside and increased rental rates.

Because of the size of the portfolio, only a select few investors had the capital to make the purchase. Fisher and Smith marketed the property to a dozen institutional and private investors, and chose TruAmerica Multifamily because they had the ability to “reach the finish line,” according to Fisher. “At the end of the day, TruAmerica, for all the right reasons, was our buyer. They are very active, had plenty of capital and understood the product. They were able to buy all 14 assets, which were all a little different,” says Fisher.

Although a new company, TruAmerica Multifamily has been making headlines for the past two years with its sizable purchases, including the $283 million purchase of the Vermont, a luxury apartment complex in Koreatown.