Bain Capital Real Estate and Magnolia Capital have formed a $900 million joint venture. The partnership plans to acquire multifamily properties in both primary and secondary markets throughout the US via a value-add strategy. They will execute this plan over the next several years.

While this joint venture has the capacity to invest nationally, it plans to focus in the sunbelt region, which has seen tremendous growth in recent years. More specifically, it is focusing on garden-style apartments with a middle-income demographic. Under the value-add strategy, target properties will likely be 1975 to 2000 construction that will support a improvements. Capital expenditures will include upgrades to unit interiors, building exteriors and amenity spaces as well as improving operations and property management house.

The sunbelt has become a hotspot for apartment activity. The region has attracted residents from more expensive markets on the two coasts, and capital has exuberantly followed. In fact, a recent interview with William Spransy, CFO of North Carolina-based Eller Capital, says that most capital is coming from the northeast and California, the same markets seeing an exodus of residents to sunbelt cities. This trend was already in place before the pandemic, but the coronavirus outbreak has fueled even more growth for the region.