In a deal the seller describes as a well-timed bit of profit taking, apartment landlord Carroll and PGIM Real Estate sold 12 multifamily communities in the Southeast for $885.5 million – more than double the purchase price.
Real estate investor Clarion Partners bought the portfolio in a venture with Blackfin Real Estate Investors.
The deal was struck just as capitalization rates hit all-time lows, Patrick Carroll, founder and CEO of Carroll, told Commercial Observer. Cap rates have edged up recently amid a backdrop of rising interest rates.
“It was probably the best possible time to sell,” Carroll said. “We were just kind of hitting this window. It wasn’t calling the top of the market, because we’re still buying.”
Carroll and PGIM, a unit of Prudential Financial Inc., bought the 12 properties — located in Florida, North Carolina and Tennessee — in 2017 for $431.4 million, Carroll said.
After the partners purchased the portfolio in 2017, they invested in cost-saving upgrades such as LED lights, low-flow toilets and eco-friendly irrigation systems. The 3,564-unit portfolio includes communities in the Central Florida markets of Clearwater, Kissimmee and Melbourne, and in the North Carolina cities of Charlotte and Wilmington.
Reflecting strong investor interest in apartments, Carroll said more than 20 potential buyers submitted bids for the portfolio.
Carroll remains mostly a buyer of multifamily units. “There’s still an undersupply of rental housing,” Carroll said. “The fundamentals are still favorable.”
Carroll moved to Miami Beach from New York City this year. His Atlanta-based company owns more than 31,000 rental units across the Sun Belt. Carroll’s South Florida properties include the 448-unit Gardens East by Arium in Palm Beach Gardens, the 400-unit Arium Sunrise, the 392-unit Arium Boca Raton and the 280-unit Arium Coconut Creek.