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CHICAGO-A joint venture between Waterton Associates, based here, and the California State Teachers' Retirement System has sold five properties in Georgia, Arizona, Oregon and Florida for a total of more than $224.6 million. All of the properties were apartment complexes that were part of Waterton Residential Fund VII and Waterton Residential Fund VIII, says Rick Wise, SVP with Waterton. Cap rates ranged from 4.5% to 4.9%, based on September 2007 annualized net operating income, less reserves, and averaged 4.6% across the portfolio, Wise tells GlobeSt.com.

The properties include Cortland Village, a 360-unit complex at 6910 NE Ronler Way, Hillsboro, OR; River Heights, a 384-unit complex at 3802 River Heights Crossing SE, Marietta, GA; Presidio at South Mountain, an 842-unit complex at 13229 S. 48th St., Phoenix; Reserve at Clearwater, a 461-unit complex at 6550 150th Ave., Clearwater, FL; and Water's Edge Apartments, a 216-unit complex in Tampa, FL. The occupancy of the communities ranges between 88% and 95%, Wise tells GlobeSt.com. The properties were marketed as a portfolio. GE Asset Management acquired Cortland Village and Milestone Investments, based in Dallas, acquired Presidio at South Mountain, Reserve at Clearwater and Water's Edge Apartments, Wise says. Atlanta-based Lane Co. and Griffin Realty Advisors acquired the 384-unit River Heights Apartments at 3702 River Heights Crossing for $40.7 million, as previously reported by GlobeSt.com.

The venture between Waterton and the California State Teachers' Retirement System (CalSTRS) was selling the properties because there were stabilized, Wise says. "We are value-add investors, so we typically have a business plan or a strategy," Wise says. "We look to sell the stabilized property within a couple of years of stabilization."

Waterton and CalSTRS are starting their fourth fund together, Waterton Residential Fund X, Wise says. The fund will have $220 million in equity with a total buying power of $625 million, Wise tells GlobeSt.com. CalSTRS is contributing 90% of the equity with Waterton contributing 10%. "The money is discretionary, which is key," he says. The fund will focus on multifamily properties with at least 200 units in high barrier-to-entry markets such as Phoenix, Denver, Atlanta, Chicago, Baltimore, Washington, DC, Las Vegas, Portland, Seattle and some markets in California, Florida, North Carolina and Texas. The typical hold period is five years with an expected internal rate of return in the "mid-teens," Wise tells GlobeSt.com.

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Wateron, CalSTRS Sell Apts, Start $625M Fund

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