BOCA RATON, FL-The Gables name, franchise and management will stay intact following its acquisition by ING Clarion, said Chris Wheeler, Gables' executive chairman of the board, during Nareit's institutional investor conference in New York City June 9. Evidence that the strategy will also remain on course came from the company's acquisition of two properties in Dallas and another in Atlanta's Buckhead section. Gables has been an active recent investor in both of those areas, which it identifies as "Established Premium Neighborhoods."
The properties are: Saltitto, a 79-unit facility on 2.3 acres adjacent to Gables Knoxbridge in the Dallas/Highland Park EPN zone; Carlisle on the Creek, a 176-unit complex on 3.8 acres along the Katy Trail in the Uptown/Dallas EPN; and Lindview, which consists of 48 existing units on 2.1 acres contiguous to the Northmoor apartments, which Gables acquired in Buckhead a month ago.
Without disclosing the price, David Fitch, CEO, said the Highland Park and Uptown Dallas properties "give us a competitive advantage via our operating economies of scale." Of the Buckhead property, he alluded to Northmoor and said Lindview, also within a targeted EPN, provides "an efficient means to control a land position while generating cash flow until we are ready to redevelop new apartment homes."
Wheeler says ING Clarion's purchase "was not an asset play. They were anxious to build a multifamily platform in the US," similar to their industrial and retail platforms. "We think the value is in the entity, the management and what they believe this franchise can do for them going forward." He also said the multifamily investments ING Clarion had already made "mirror ours almost exactly" in market and type.
Asked what was the trigger point to sell, Wheeler said, "they hit a number we felt was good, and we have consistently said we wouldn't let touchy feely or ego issues stand in the way of providing maximum shareholder value. . .[and have been] frustrated with being unable to realize total shareholder value" as a public company.
Regarding potential condo conversion, Wheeler added, "We believe 50% of our portfolio is immediately condo convertible, and it would not surprise me" if the new owner did pursue conversion or sales to converters. "We would have sold a significant part of the portfolio to monetize the condo value that's there."
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