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NEW YORK CITY-Opportunity knocked and the Praedium Group, the New York City-based real estate investment firm, answered. Just six weeks after getting wind of the deal, Praedium has purchased a 1,221-unit multifamily portfolio in Florida and Georgia from Affirmative Equities for $26.3 million, or an average selling price of $21,600.

The deal was a textbook case in the distressed property world–an owner facing possible foreclosure, properties underleased compared to others in their market and the finance mechanisms in place to make the deal happen quickly. “It reminds me of the good old days,” says Frank Patafio, CFO of Praedium. “We’re an opportunistic firm looking for arbitrage opportunities in the market, and this was a classic case.”

Praedium focuses on adding value to underperforming, undervalued assets throughout North America, owning properties in all asset categories. Office buildings comprise approximately 55% of the holdings, with multifamily and mixed-use each at about 14%. This latest transaction increases the multifamily portfolio by 12%.

The Florida and Georgia properties are class C assets built in the mid-1980s and late 1970s. They are about 75% occupied in markets that are generally 90% rented. Patafio says the properties should be stabilized in 18 to 24 months through capital improvements and an aggressive leasing effort, and he expects Praedium to hold them for three years. The former owner will continue to manage the portfolio.

Praedium’s Performance Fund IV purchased the assets with capital from its $350 million in equity commitments.

With more than $2 billion in investments to date, the Praedium Group has attracted investors including public and corporate pension funds, financial institutions, insurance companies and endowments.

Earlier this year, Praedium paid $26.5 million for 627 residential units in Queens, NY for an average price of $42,000 per unit. The firm was also involved as a venture partner in the acquisition of Trade Street Plaza, a 102,673-sf office building in Miramar, CA. The 15-year-old, three-story building was purchased for $10.1 million.

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