LOS ANGELES—TruAmerica Multifamily and its institutional partners DVO Real Estate and RCG Longview have purchased a five property multifamily portfolio in Seattle and Portland from FPA Multifamily for $115 million. TruAmerica purchased the property in an off-market transaction at a 40% discount to replacement cost, making it an extremely attractive value-add purchase. This is the investor's first purchase in the Portland submarket.
“Bob Hart has had a longstanding relationship with Greg Fowler, and when they heard about our Southern California portfolio purchase in January, Greg reached out to Bob and began discussions on this portfolio,” Mark Enfield, chief administrative officer at TruAmerica Multifamily, tells GlobeSt.com. “Certainly the off market nature and fantastic markets—some of the best in the country—are the most compelling reasons that attracted us to the deal. We got both an off-market and a portfolio discount. We feel like we bought this at close to a 40% discount to replacement cost.”
The portfolio is directly in line with TruAmerica's investment profile. All of the properties are class-B workforce housing apartment complexes in or near employment centers with easy access to transit. The portfolio includes the Lighthouse, a 76-unit complex in Kent, WA, the Village at Lake Meridian, a 177-unit in Kent, WA, Park at Tualatin, a 210-unit community in Tualatin, OR, a suburb of Portland, which were purchased in July, and Haven at Charbonneau, a 126-unit community in Wilsonville, OR, and Somerset, a 329-unit community in Kent, WA, which were purchased in June. The properties were all purchased from FPA Multifamily in two separate transactions.
TruAmerica will invest an additional $11 million to renovate the five properties. Roughly half of that figure will be dedicated to interior renovations, about $6,000 per unit. “In almost all cases, we are doing a pretty substantial interior unit rehab, where we are bringing in new flooring, new appliances and some aesthetic things, like two-toned paint, light fixtures and new countertops,” says Enfield. “The units will look brand new when they are done. Of the five properties, only two have had any interior unit renovation, so that provides a lot of value-add upside to us.”
Enfield says that these markets will continue to be a focus for the company, and they already have several deals under contract.
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