CARROLL, PGIM Sell Three Apartment Portfolios for $1.1B
These dispositions represent 4,121 units across three Southeastern states.
CARROLL and PGIM Real Estate have sold 12 multifamily communities, valued at more than $1.1 billion, in the Southeast.
The deal represents 4,121 total units across Florida, North Carolina, and South Carolina. The 12 communities were part of three separate joint venture transactions between institutional fund vehicles managed by PGIM Real Estate and CARROLL that were completed in 2018.
Included in the sale were: six Raleigh communities (ARIUM Southpoint, ARIUM Kildaire, ARIUM Weston, ARIUM Lake Lynn, ARIUM Lake Johnson, ARIUM Trailwood); three Charleston communities (ARIUM North Charleston, ARIUM St. Ives and ARIUM Mt. Pleasant); and three South Florida communities (ARIUM Boca Raton, Centro at Davie by ARIUM, ARIUM Boynton Beach).
The buyer was not released.
At the time of sale, each of the communities were operating with strong occupancy and double-digit lease tradeouts.
“Closing on these 12 properties is a big win for us and our investors,” M. Patrick Carroll, founder and CEO of CARROLL, in prepared remarks. “These communities offered tremendous upside in 2018.
Cathy Marcus, global chief operating officer and head of U.S. Equity for PGIM Real Estate, added that the company will continue to pursue investment opportunities in the Sun Belt market “where there is a clear demand for affordable housing.”
Potential Headwinds for the Sun Belt/?
Without a doubt there is strong interest by investors in the Sun Belt’s apartment markets at the moment.
However, an analysis from BTIG Research predicts the staggering pace of new leases, which have posted 15 to 25% growth this year, will likely moderate, particularly in the Sun Belt region. Lease spreads appear to be near their peak in several markets, BTIG’s James Sullivan and Ami Probandt note, and affordability “could become an issue” next year.
BTIG predicts supply will remain “manageable” next year thanks to lower-than-usual permit activity in 2020, at the pandemic’s apex. However, supply increases could impact results at the end of next year and into 2023, with a greater impact expected in Sunbelt markets than on the coasts (which will likely have the strongest growth rates).