RREAF Holdings LLC, a private real estate investment and development firm, in partnership with 3650 REIT and real estate investment and financial services firm DLP Capital, today announced the acquisition of “Southeast Multifamily Portfolio III,” with a capitalization of approximately $500 million. The portfolio includes 10 multifamily properties consisting of over 2,744 units located in Arkansas, Georgia, Indiana, Mississippi, North Carolina, Oklahoma, and South Carolina and marks the trio’s third portfolio acquisition in less than 12 months.
The portfolio acquisition, believed to be one of the largest multifamily transactions in 2022, will infuse significant capital into quality, workforce rental units at a time when the nation is increasingly experiencing a shortage of affordable options. According to the National Multifamily Housing Council, 4.3 million more apartments are needed by 2035 to meet the demands for rental housing.
The acquisition, spearheaded by RREAF, was purchased from one seller. All of the apartment complexes are primarily in suburban-metro areas, with no new multifamily supply within a five-mile radius of most of the properties. The properties were built between 1998 and 2012 and currently have a 93% collective occupancy. Significant capital renovations will be made to all units. RREAF, 3650 REIT, and DLP Capital previously collaborated in producing superior results for investors with TransCoastal 21 and Gulf Coast II portfolios.
“The closing of the Southeast Multifamily Portfolio III marks a milestone for our firm for affordable, quality housing options to renters in the Southeast as RREAF continues our business plan of providing superior living options at an affordable price,” said Kip Sowden, Chief Executive Officer of RREAF Holdings. “The size and versatility of the portfolio represents our continued success. We would like to extend a thank you to our partners, DLP Capital and 3650 REIT, on their partnership in this landmark portfolio.”
In addition to equity capital provided by the three portfolio partners, financing was provided by Nathan Stone and Guy Griffith at Berkadia, a leading multifamily investment sales advisor, mortgage banker and loan servicer. RREAF’s in-house property management company, RREAF Residential, will be taking over property management on all assets. RREAF Residential is a fully integrated property management firm specializing in workforce housing communities. RREAF’s multifamily division has over 12,000 units under ownership and transaction volume totaling $1.4 billion in the past year.
“SMPIII marks our third portfolio transaction with RREAF and DLP Capital, totaling more than 7,500 multifamily units, and is a continuation of our focus on building long term relationships with best-in-class sponsors. RREAF has consistently demonstrated their ability to outperform the market while delivering high quality attainable housing to their residents and we look forward to continuing to support their strategic growth plans. The transaction also reflects our continuing belief in the strength of the multifamily market in the Sunbelt states as migration patterns continue to drive demand in these markets in the face of the ongoing housing shortage and economic headwinds nationwide,” said Jonathan Roth, Co-Founder and Managing Partner of 3650 REIT.
“The affordable housing crisis pervades every state in the nation, making this multifamily transaction all the more significant,” said Don Wenner, Founder and CEO of DLP Capital. “Through our collaborative investment and our mission to keep these apartments affordable for the local workforce, we will impact hundreds of families who want to live where they work. Additionally, we can deliver targeted returns to our loyal investors who believe in our mission.”
The $500-million portfolio includes two properties in Arkansas, Glen at Polo Park in Bentonville, and River Pointed in Maumelle; Village Mill Creek in Statesboro, Georgia; two properties in Indianapolis, Echo Ridge and Pheasant Run; Waterford Place in Greenville, North Carolina; Reserve at Long Point in Hattiesburg, Mississippi; two properties in Oklahoma, Traditions at Westmoore in Oklahoma City and 5iftyOne at Tradan Heights in Stillwater; and Broad River Trace in Columbia, South Carolina. Upgrades to property amenities will include electric automobile charging stations, dog runs, pickleball courts, and business centers with fiber cable. Updating will include pools, tennis courts, outdoor kitchens, entertainment packages, clubhouses, and more efficient lighting.
RREAF, 3650 REIT, and DLP Capital partner together and work diligently to create the highest quality, affordable living solutions for residents in the rapidly growing Sunbelt region.
About RREAF Holdings
RREAF Holdings LLC ("RREAF") is a privately held, vertically integrated commercial real estate company based in Dallas, Texas with roots that go back 35 years in the industry. RREAF focuses its portfolio of commercial real estate projects and development under five main divisions catering primarily to middle America with its programmatic value-add multifamily acquisitions, opportunistic hospitality and resort acquisitions, core ground-up development, large and highly amenitized master planned developments and its ground-up extended stay hospitality development division.
RREAF employs over 375 people, mostly across the Sun Belt region, handling a wide range of commercial real estate investment matters, including in-house underwriting, due diligence, capital markets, acquisition, asset management, property management, construction management, project development, accounting and legal support. RREAF, along with its debt and equity partners, has built a diversified portfolio in its core competencies in excess of $3.5 billion in assets, across 15 states, under management. Winner of the 2021 Multifamily Operator of the Year Award and selected as an Optigo® 2022 Select Sponsor, RREAF values the impact that it has on local communities. RREAF's mission is to enhance the lives of its investors, partners, residents and guests by providing outstanding service, excellence and expertise with integrity, vision, values and purpose. For more information, please visit rreaf.com.
About DLP Capital
DLP Capital, headquartered in St. Augustine, Florida, is a private real estate investment and financial services company focused on making an impact on four major crises in America: Affordable Housing, Jobs, Legacy and Happiness. The company achieves this through acquiring, developing, and building relationships, housing, leaders, and organizations. With more than $3 billion of assets under management, DLP Capital has been on the Inc. 5000 list of “Fastest Growing Private Companies in America” for 10 consecutive years. The firm has an expansive array of business divisions and companies including real estate investment funds, commercial real estate lending, construction management, development, sales, leasing, title services, and loan servicing. Through the proprietary Elite Execution System, as well as its exclusive membership platforms focused on business scaling, investment housing, family, and wealth, DLP Capital impacts lives by empowering its clients to choose, create, grow and preserve prosperity. For more information, follow us on @DLPCapital or visit DLPCapital.com
About 3650 REIT
3650 (pronounced “Thirty-Six Fifty”) REIT is a nationwide commercial real estate lender originating and servicing portfolio loans for relationship borrowers in addition to other strategic investments. 3650 REIT’s highly differentiated investment process, national scale, vertically integrated platform and rated special servicer status enable it to deliver tailored financing solutions, high-touch service and reliable, customer-focused outcomes. Additionally, 3650 REIT’s ability to retain the risk on each investment allows it to closely manage its portfolio and maintain a true alignment of interests with its borrowers. Co-Founders and Managing Partners Toby Cobb, Justin Kennedy and Jonathan Roth have played leading roles in the evolution of the CRE debt markets. 3650 REIT is headquartered in Miami, Florida with offices in New York, Los Angeles, Dallas, Atlanta and Nashville.