$34M Double Play Begins 1,000-Unit Buying Drive

Lee Surtees, acquisitions manager for Arlington Properties, says the company currently manages more than 8,000 units in the Southeast for other owners. "We want to continue growing our management portfolio, but doing it with properties we control rather than those controlled by other owners," he says. He adds that the company expects to invest another $60 million this year to acquire and develop multifamily assets.

Surtees tells GlobeSt.com that the investment group plans to invest $2,000 to $10,000 per unit to renovate its acquisitions. "What you'll see us doing is going in and buying 1980s to 1990s vintage properties, upgrading the interiors and exteriors, potentially re-branding the properties, then holding them for three to five years," he explains.

Surtees says the 12-year-old Summerfield Place at 1525 E. Pass Rd. in Gulfport won't require much in the way of upgrades, however. Arlington Properties had managed the 96%-occupied, class A asset for a third-party owner during its reconstruction after Hurricane Katrina in 2005. "We'd managed this property for a few years, knew it inside and out and liked it," Surtees says. When RealSource Holdings LLC of Salt Lake City, UT wanted to sell, he says Arlington Properties aggressively pursued the opportunity.

The 16.6-acre Summerfield Place is a mix of one-, two- and three-bedroom units averaging 1,030 sf. The average rent is about $900 per month.

The 1986-constructed Madison Hill Apartments at 6620 Old Madison Pike NW in Huntsville will receive about $1 million of upgrades, according to Surtees. The class B complex was acquired from Madison Hill Investors in San Ramon, CA.

Arlington Properties was drawn to the asset because "Huntsville is an up and coming market with strong fundamentals and this property is extremely well-located," Surtees says. Madison Hill Apartments, which is about 85% occupied, sits on 12.5 acres, Its one- and two-bedroom units average 850 sf; the average monthly rent is $650. Ryan Griffin with Rock Apartment Advisors in Birmingham brokered both deals for the buyer and sellers.