NEWPORT BEACH, CA-CORE Realty Holdings LLC has acquired a multifamily portfolio of 2,399 units in Richmond, VA and Greensboro, NC for $188 million in a deal involving 208 investors in eight separate offerings that are fully subscribed and closed. The tenant-in-common sponsor says it believes this is the largest TIC value-added multifamily acquisition in the country to date.

Sterling McGregor, chief investment officer for CORE, says that the deal was unusual in that it was a principal-to-principal transaction with no broker representation. A member of the selling group, Irvine-based Real Estate Partners Inc., will retain day-to-day property management and capital improvement supervision, he adds.

The 2,499 units are in eight properties, three of them in Richmond and the remaining five in Greensboro. Although the portfolio is 97% occupied, CORE president and CEO Russ Colvin says that the deal is a value-added play because the properties are in supply-constrained markets.

In addition, Colvin says, the complexes are in good locations, show solid operating performance and are in "cities with stable expanding economies within infill urban areas." Job growth as a result of the construction of the new Greensboro Urban Loop freeway and the Greensboro Piedmont International Airport expansion also will benefit the properties, Colvin says.

McGregor points out that CORE acquired the properties at a price below replacement cost, with the necessary capital reserves to make "substantial cosmetic improvements designed to increase rents." He notes that in addition to the Greensboro Urban Loop construction and the airport expansion, the area will benefit from the addition of the future mid-Atlantic hub for Federal Express, a one-million-sf facility that is expected to be operational by 2008.

McGregor cites forecasts that the new FedEx hub is expected to generate 16,000 jobs over the next 20 years. In addition to FedEx, Dell has also completed construction of a 750,000-sf manufacturing plant in the area, which has attracted new logistics, packaging and automation firms to the region.

CORE's funding for the acquisition included financing that the company locked in "a number of months ago when Treasury yields were low," according to Colvin. He says that "allowed us to bring below market-rate financing to our investors at a rate of 5.33% fixed for 10 years."