IRVINE, CA-“I have a hard time distinguishing competition between class-A and class-B assets; there's plenty of competition for both.” So says Kyle Winning, CIO of Steadfast Cos., who maintains that demand is strong for purchasing multifamily properties in both classes.
“The 10-year Treasury has bumped up a bunch and backed off some, and we have seen some transactions where the numbers didn't work,” Winning tells GlobeSt.com. “We won't know what's taking place until it plays out over the next couple of months.”
As GlobeSt.com recently reported, Steadfast Income REIT Inc. has acquired three apartment communities in separate transactions for an aggregate purchase price of roughly $50 million. The properties are located in Texas and Indiana, increasing the firm's foothold on properties in the mid-section of the country.
One of the properties, Lodge at Trails Edge in Indianapolis, was sold to the REIT by the Praedium Group, bringing the REIT's total holdings in the Midwestern and Southern states to 41. Winning tells GlobeSt.com that the Lodge is the REIT's first entrance into Indianapolis, although Steadfast had been considering the market for a while. “We couldn't find a whole lot of assets that work for us, but this one is a solid B asset with yield parameters [we like].”
Steadfast is investing in quite a few multifamily properties in the country's mid-section, seeking markets where there is job grow, population growth and either limited supply or supply that's appropriate for the market, Winning says. “While there is a lot of supply in Texas, we're not of the opinion that it's inappropriate for what's taking place there. We clearly have more pending in Texas, and while we don't have anything else in Indiana pending right now, we're still shopping for properties there and in many other places.”
Given the yields in the middle of the country, “that's where things work best for us,” Winning adds. The firm has some assets tied up in a new state for the REIT that is adjacent to its existing footprint, and these deals should be finalized within the next month or so.
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Carrie Rossenfeld
Carrie Rossenfeld is a reporter for the San Diego and Orange County markets on GlobeSt.com and a contributor to Real Estate Forum. She was a trade-magazine and newsletter editor in New York City before moving to Southern California to become a freelance writer and editor for magazines, books and websites. Rossenfeld has written extensively on topics including commercial real estate, running a medical practice, intellectual-property licensing and giftware. She has edited books about profiting from real estate and has ghostwritten a book about starting a home-based business.
