Apartment Deals Keep Coming in Sunbelt Region

The Southeast is experiencing substantial population and employment and income growth that is forecast to outpace the US average by 2x over the next five years, making it a prime location for apartment investors.

The deals keep coming. 

Starwood Real Estate Income Trust announced this week that it had acquired a multifamily housing portfolio of 15,460 units located in 62 communities from Strata Equity Group, a privately held real estate investment and management company based in San Diego. Terms of the transaction were not disclosed.

The acquired portfolio is located in 27 markets across 10 states, primarily in the Southeast region of the United States, including Georgia, Tennessee, and North Carolina. 

These markets offer lower taxes and a cost of living below the national average, and continue to benefit from migratory trends toward the Sun Belt and other growth markets. The portfolio’s units offer affordability with high-quality amenities. Strata will remain in an asset management role for the acquired portfolio.

This is one of several large transactions in recent days. Greystar just sold a multifamily fund for $3.6 billion and Morgan Properties acquired two portfolios.

Even more recently, Kip Sowden, CEO of RREAF Holdings, announced its acquisition of their TransCoastal 21 multifamily portfolio, which includes 21 different multifamily properties consisting of over 4,000 units located in Mississippi, Alabama, Florida, Texas, Arkansas, Louisiana, Georgia and North Carolina.

RREAF Affordable Housing Portfolio Grows

The closing of the TransCoastal 21 portfolio marks a key milestone for RREAF as it has increased its portfolio of affordable housing to over 50 communities with more than 14,000 units throughout the Sun Belt region.

“RREAF’s team looks forward to upgrading these properties consistent with its investment strategy which has proven highly successful,” Sowden tells GlobeSt. “According to the National Multifamily Housing Council, the multifamily sector of the commercial real estate space continues to show resilience and strong results.”

RREAF Holdings continues to be active in this sector with over 7,400 units acquired since the onset of the pandemic, including the Sunbelt 12 portfolio it closed last December.

For Starwood Real Estate Income Trust, its deal means that as of Sept. 30, the SREIT portfolio had a total asset value of $12.6 billion across 246 properties. 

“Portfolio recapitalizations are a key component of our investment strategy for SREIT and this transaction is another example of our ability to offer an attractive structure that meets the objectives of large owners seeking liquidity,” Ethan Bing, managing director at Starwood Capital, said in prepared remarks.