JACKSONVILLE, FL – Multifamily real estate investment firm, Southeast Property Group, has acquired a two-property, 328-unit apartment portfolio in Jacksonville, Florida. Due to the distressed nature of the properties, Colonial Forest and Northwood Apartments will be re-branded to The Belmont and Avenue at 1601, respectively.
The Florida based investment firm has already begun a $9.7 million renovation program that includes significant updates, such as: new roofs, exterior paint, re-plumbing, amenity and landscape upgrades and other improvements, including updates to all of the apartment unit interiors.
“We are very excited to have had the opportunity to purchase both assets at below market pricing. We’re looking forward to improving not just the look of the properties, but the overall community for the immediate area as well as for the City of Jacksonville.” said Southeast Property Group Principal, Joe Rubin.
The properties were acquired from the Chetrit Group, headed by Joseph Chetrit and were originally acquired as part of an 8,000-unit portfolio, secured by a loan from JP Morgan. Southeast Property Group was presented the distressed opportunity from an off-market brokerage relationship.
“We are pleased with being able to transact with Mr. Chetrit. It was a very unfortunate situation, but thanks to our capital partners, we stand ready with plenty of dry powder to provide capital and expertise in these exact scenarios. In a very uncertain market, our team was able to move swiftly to make sure the transaction closed on the agreed upon price and terms.” said Southeast Property Group Principal, Richard Shuster.
If you’re looking for a great property to invest in, you may have already heard “Location, location, location!” Certainly, finding the right spot is an important starting point. Beyond identifying the right location, you’ll want to pick your asset class, such as opting for multifamily, retail, office, or development, which I’ve covered in detail in previous articles. You’ll also need a business plan in place to show to others, including partners, lenders, and other investors.
As you go through the process, keep in mind that analyzing the right data can reveal many factors about the market you’re considering. The key is to find the right data and interpret it when evaluating a market. You may discover that the property you’re considering is in a growing area or could increase in value due to economic factors in the region.
Consider the following guidelines in mind as you review data and make a real estate investment:
Be Aware of Job Figures
When looking at investing in a city, it may seem reasonable to evaluate the job market. Areas that are growing and hiring more employees could be a sign of a strong economy. However, in today’s hybrid world, determining job growth could be more challenging. That’s because if a job is reported in one market, the person hired might live in another state and stay there to work remotely. Given this, the job data related to a city might not give the full picture of who is living there. Check carefully to see where the jobs are being offered.
Check Population Data and Demographics
If a city is growing, and more professionals are moving in, it could be a positive sign for the local economy. Look at studies on returning to the office or resources such as Kastle, which analyzes office occupancy rates, to see if employees are working face-to-face in the location you’re considering. You can also check what types of industries are operating in the area. Once you know this, you’ll be able to think about real estate assets that would complement the trends. For instance, if a market is known as a big tech center, you could look at what type of office space is needed. You could also check what kind of housing will be in demand, such as if the workers are looking for roommates in an apartment or prefer single-family homes. Look at apartment occupancy levels to get an idea of residential trends.
Understand Foot Traffic Numbers
With the advent of anonymized cell phone data, we can now access useful information about a market and view the related trends. You could look at foot traffic numbers for a location you are evaluating. You might be able to identify commute patterns and understand how people move through a particular space. This can be especially valuable when making office and retail decisions.
Look at City Tourism and Projects
Check transit studies to learn figures related to subway travel, along with rail and highway routes. Find how many people are coming through a nearby airport regularly, and review tourist numbers and hotel occupancy rates. If these statistics are up, it could be a sign of a strong local economy.
In some areas, you might spot changing infrastructure such as a new subway station that is being built or a train route which will be added to a line. You could learn about a plan to build a city park or other public space. Knowing which projects have been identified, along with when they are expected to be finished, can help you make a decision. You’ll be able to compare this insight to the other information you’ve gathered to get a strong sense of where the market is headed.
While considering location will also be essential when making a real estate investment, there are many additional resources you can tap. With the data that’s now available, you can look at the changes in population, see what industries are booming, and know how people are moving through the area. All these factors can help you see if the location you’re considering is right and has the potential to generate an outsized return on your investment.
Las Vegas-based Rio Properties has shed itself of five multifamily assets totaling roughly $30 million.
Colliers represented Rio Properties, which had managed the assets for more than 25 years and sought a creative tax-efficient retirement strategy, in the sales. The five-property portfolio spans the Los Angeles submarkets of Venice, Del Rey and Marina del Rey, as well as Oakland.
Colliers and Rio Properties worked to exchange three of the five properties into tax-sheltered multifamily funds and transition two into real estate investments trusts.
“These transactions exemplify Colliers’ commitment to providing strategic solutions that go beyond conventional approaches,” Kitty Wallace, a senior executive vice president at Colliers, said in a statement. “We take pride in our ability to understand our client’s unique goals and tailor innovative strategies that deliver tangible results. This successful portfolio transaction is a testament to our team’s expertise and dedication.”
By opting for multifamily contribution funds and real estate investment trusts, Rio Properties was able to minimize tax obligations, eliminate the hassle associated with property management and diversify its investment portfolio, according to Colliers.
The portfolio was acquired by multiple buyers, including Advanced Real Estate and Virtú Investments, both of which Colliers also represented in the sales.
Advanced acquired two Venice properties, located at 1400 and 1500 Venice Blvd., via a contribution fund agreement worth more than $13 million. The newly acquired 40 units will be added to its 11,000-unit portfolio in Southern California.
The company ultimately plans to dispose of the properties via a 1031 exchange – a real estate property swap – to defer capital gains taxes.
“Our plan for ‘The X Fund’ is to gather as many smaller properties as possible, renovate them (if needed) through our in-house renovation company, manage them well and improve their value,” Rick Julian, chief executive of Advanced, said in a statement. “Ultimately, we will sell this portfolio and trade into much larger and more efficient properties.”
Virtú Investments acquired 612 Mariposa Ave. in Oakland via a contribution fund worth more than $10.6 million.
“This is an example of the exciting opportunity that Virtú Evergreen Fund offers sellers who need help navigating the disposition and reinvestment process of legacy assets,” Evan Faulkner, head of acquisitions for Virtú Investments, said in a statement. “Asset owners enter our diversified, professionally managed fund portfolio without the headache and pressure of traditional 1031 timelines.”
The other two properties, located at 4034 Redwood Ave. in Del Rey and 5100 Via Dolce in Marina del Rey, were sold to and will be managed by a real estate investment trust with Ares Management and RBC Capital Markets.