Miami Investment Group Brings $100M-Plus Equity Purse to Texas

IRVING, TX-The Miami-based J.I. Kislak Inc. has Dallas/Fort Worth at the top of its shopping list for a $100-million, private equity pool targeting multifamily property acquisitions in the West. The first deal was the $27.4-million acquisition of the 408-unit Arbors of Las Colinas.

"We are looking to do a deal a quarter," says Tom Bartelmo, president of J.I. Kislak. He tells GlobeSt.com that the plan is to acquire "three or four" more assets in Dallas/Fort Worth while scouting for buys in Austin; Atlanta; Las Vegas; Phoenix; Tucson; Southern California; Tampa; and, of course, his homeport of South Florida.

The westward push is being led by Eric Calub, who was hired in the summer from locally based La Paul Partners. The portfolio now holds 2,700 units, but Bartelmo wants to push it to about 4,500 in the coming year. The investment group is targeting complexes with 200 or more units in the $20-million to $50-million range as well as looking for development partners. "We will look at class As, but the sweet spot is a B middle class property in a nice location," Bartelmo says. Though nothing is under contract, he's hoping to have a second Texas deed in hand by midyear 2006.

The Arbors of Las Colinas at 1000 San Jacinto Dr., tucked into the Las Colinas submarket, was acquired from Miami-based Equity Residential Properties Trust. The 96%-leased complex is a mix of one- and two-bedrooms, averaging 825 sf and renting for $675 per month. There are no plans for a condo conversion although the new owner's team is well versed in the product, Bartelmo says.

The upside will come from eliminating concessions and tapping a market with prices lower than SoCal, Las Vegas and South Florida. "I think there's upside built into the relative low price per door," Bartelmo explains. As for concessions, it's not part of the new owner's MO. "We're not a big concessions company," he says, adding existing giveaways will be "burned off relatively quickly."

Bartelmo says the Arbors, viewed as an eight- to 10-year hold, was bought with 1031 exchange funds from the sale of the 480-unit Cayman Bay at 2701 N. Rainbow Rd. in Las Vegas and financing from Wachovia Multifamily Inc. The 90%-leased Cayman Bay went to Hamilton Zanze & Co. of San Francisco.