AUSTIN, TX-AREA Property Partners in New York City and San Francisco-based McDowell Properties joined forces to acquire $215 million in defaulted debt on a 4,733-unit apartment portfolio. The joint venture acquired the debt, which is secured by 17 multifamily assets in four states, at a 40% discount.

Though a specific list of the properties were not available, the portfolio spans Florida, Oklahoma and Texas, with the greatest concentration of assets located in Austin. The upside potential in this deal is the occupancy, which currently stands at 84%.

“The transaction represents the rare opportunity to acquire a portfolio of assets in this dynamic high growth market at an attractive discount to the current debt basis,” said Steve Wolf, AREA partner in a statement detailing the acquisition.

Wolf further stated that the JV plans to take a fee title to the assets and reposition them. The repositioning includes exterior renovations, landscaping improvements, “The business plan calls for taking fee title to the assets and repositioning each asset, including exterior and interior renovations, landscaping improvements and amenity upgrades.

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“These assets will be able to compete with newer complexes in their submarkets while offering a much stronger value within their rent levels,” he commented.  

Representatives from AREA Partners were not available for comment, though a spokesman for the company tells GlobeSt.com that the buyers are working now to figure out how much capital investment will be required for renovations.

“Multifamily fundamentals are improving, and now is a good time to buy into it,” the spokesman adds. “Multifamily is considered a great investment, especially in high-growth markets such as Austin.”