Lion and Marble Plan Further Renovations for Array
Lion Real Estate Group and Marble Partners acquired Array Apartments, a 369-unit multifamily property located at 2101 Burton Dr., from Castle Lanterra Properties in a joint venture with Aegon Real Assets US.
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AUSTIN, TX—Representing the fourth acquisition in the East Riverside neighborhood for real estate investment firms Lion Real Estate Group and Marble Partners, Array Apartments is a 369-unit multifamily property located at 2101 Burton Dr. The property was acquired from Castle Lanterra Properties in a joint venture with Aegon Real Assets US, a division of Aegon NV, a multinational life insurance, pensions and asset management company headquartered in the Netherlands.
The property, consisting of one-, two-, and three-bedroom units, had substantial renovations under the two previous owners. Lion plans to complete renovations and further stabilize the property.
“This is our fourth acquisition in the last 12 months in the immediate area. We also own the adjacent Alister and Emerson Apartments, which total 397 units, and the Sofia Apartments with 210 units one street over,” Jeff Weller, Lion co-founder and managing principal, tells GlobeSt.com. “All are value-add projects that allow us to capitalize on the area’s growth, particularly with the Oracle development and revitalization.”
For Castle Lanterra Properties, which acquired the property for $38.5 million in 2016, the transaction marks the completion of the firm’s value-add plan for Array, and highlights the success of the company’s strategic investment approach.
When Castle Lanterra acquired the community, then called Arrangement, the East Riverside-Oltorf section of southeast Austin was beginning to emerge as an attractive neighborhood for young professionals. In the past three years, the neighborhood has exploded in popularity, with significant new residential development and a new Oracle corporate campus bringing thousands of jobs to the area. By capitalizing on the neighborhood’s upside, Castle Lanterra was able to successfully implement operational and physical improvements at Array to enhance the property’s curb appeal, stabilize its tenant base and improve cash flow.
“With Austin’s overall rejuvenation over the past decade, the city has boasted one of the country’s strongest multifamily markets this cycle, and we’re very proud of our success at enhancing the amenities and infrastructure at this prime residential community,” said Castle Lanterra Properties’ CEO Elie Rieder. “When we purchased Array in 2016, this pocket of the city was just beginning its revitalization, and we recognized that applying our successful management style in a burgeoning neighborhood would be extremely effective. By acquiring Array below replacement cost and executing our business plan, we were able to create value very quickly. We ultimately capitalized on the strong investor interest in East Riverside and were able to exit our investment several years ahead of schedule while meeting our projected sales price.”
Austin leads rent growth at 3.4% rental growth and 94% stabilized occupancy, according to ApartmentData.com. Supporting this trend in Austin is the continued expansion and corporate relocation of tech companies, especially in the north and northwest sectors of the city.