Record Apartment Transactions Volumes Continue with $400M Dealmakers

Multifamily acquisitions reached record levels in Q2 this year, according to CBRE and Berkadia said it expects that pace to continue or even strengthen as this year continues.

Next in line is Redwood Capital Group, a vertically integrated multifamily investment manager, which Tuesday announced it has acquired Brook Run, a 182-unit apartment community in Arlington Heights, Ill., and Wilder, a 381-unit apartment community in Austin, Texas. 

The acquisitions, which were separate transactions, reflect Redwood’s commitment to aggressive and strategic national growth plans to double in size by 2025. 

Including these transactions, Redwood has completed six acquisitions totaling approximately $400 million in value and 1,706 apartment homes the past 12 months.

The rapid growth of the company’s portfolio is part of a five-year strategic plan to double the size of Redwood’s portfolio, which was valued at $1.7 billion in apartment assets under management at the start of 2021. The company’s portfolio of almost 9,000 units is concentrated in the Southeast, Southwest and Midwest. 

Redwood projects an additional $200 million of deals in 2021 as its pipeline remains very active. Redwood’s investments team is led by Managing Directors Bill McDougall and Field Stern in Chicago with acquisitions efforts supported by Directors Ryan Steppe and Bill Rose in Atlanta and Dallas, respectively.

Carter Funds Cashes Out on Value-Add Properties

On the seller’s side, Carter Funds, a fully-integrated real estate investment and fund management firm, announced the sale of 16 garden-style multifamily properties located throughout the southeastern United States. Its value-add strategy paid off handsomely.

The properties were owned by Carter Multifamily, a Carter Funds company, and sold during the week of Sept. 13 for a combined sale price of approximately $394 million. Carter Multifamily purchased the properties throughout 2019 for $274 million.

During the approximate two-year average hold period of the properties, Carter Funds completed exterior and interior unit renovations, decreased vacancies, and increased average monthly rents on occupied units. 

Exterior renovations included enhancements to community amenities, including the addition of sport courts and gaming areas, updated pool decks, new seating areas, and outdoor kitchens. 

Interior renovations included installing gourmet kitchen finishes, new flooring, bathroom remodels and upgraded appliances and lighting. As a result of these renovations, operational improvements, and solid market performance, Carter Funds was able to re-position and market the assets as beneficial value-add opportunities in high-growth submarkets of the Southeast region.

Ray Hutchinson, chief investment officer of Carter Funds, said the company is looking for new ways to generate value and take advantage of the strong multifamily fundamentals in the southern markets as it considers for future acquisitions, while also providing middle market Americans with affordable, quality housing.