LOS ANGELES—TruAmerica Multifamily's recent purchase of the 14-property JH Real Estate portfolio is a marvel. GlobeSt.com reported earlier this week that the multifamily investor purchased the portfolio, which is located in markets throughout Southern California, for $481 million. The portfolio would have taken years to assemble had the properties been purchased individually. Even better for TruAmerica, each of the 14 properties fit in perfectly with the company's investment strategy, which is to buy West Coast class-B assets with a value-add component.

“We have an opportunity here to really transform these communities and significantly improve the rental experience, while at the same time producing a return for our investors,” Mark Enfield, chief administrative officer at TruAmerica Multifamily, tells GlobeSt.com. “This is all workforce housing, but there are a number of things that you can do to these assets to make it much nicer for the renters. These are predominately 1980s vintage assets that haven't had unit interior upgrades done to them, so when you put in new appliances, quartz countertops and new lighting, that all makes a huge difference in these interiors.”

TruAmerica will invest $40 million total into the properties, upgrading both the interior units and exterior—which includes improvements to the pool areas, common areas and landscaping. However, these upgrades will not elevate the properties to class-A status—mainly because TruAmerica wants to be in the class-B business. “Our business plan is to upgrade the properties to a point where we are not competing with class-A assets and new construction, so we can still achieve a rent lift but we will not compete with those assets,” says Enfield.

TruAmerica purchased this property a little differently than in previous acquisitions. It still partnered with its institutional investors, Allstate and Guardian Life Insurance, but also paired with an international investor for the first time and used a $354 million Fannie Mae credit facility from Berkeley Point Capital. “The Fannie Mae credit facility really gives us flexibility as to what kind of debt we put on, and if we so choose in the future, we can additional properties to the facility,” says Enfield, who adds that they felt like they got a good price for the portfolio. “We underwrote each asset individually, and we have a specific value-add program for each asset individually. Some assets will have a larger renovation program, and other assets different have operational efficiencies; and each submarket is different as well. It is not the same size, or age, or market demographic for any of the properties, but they each stood on their own legs.”

This will likely be one of the largest if not the largest multifamily transaction in the market this year. Of course, TruAmerica also had one of the largest multifamily purchases of 2014: the Vermont in Koreatown, a 464-unit luxury apartment complex acquired from J.H. Snyder Co. for $283 million.