RREAF Holdings, DLP Capital and 3650 REIT Partner in $534 Million Portfolio Acquisition

RREAF Holdings, DLP Capital and 3650 REIT Partner in $534 Million Portfolio Acquisition

Phase One Includes 13 Properties in Sun Belt Region

DALLAS RREAF Holdings LLC, a private real estate investment and development firm based in Dallas, Texas, today announced, together with its partners DLP Capital and 3650 REIT, the successful acquisition of a 13-asset multifamily portfolio in the Sun Belt region consisting of 2,000-plus units. This is the first tranche of a large, 3-phase acquisition, which is slated to close by early November. The entirety of the portfolio totals 21 multifamily communities and 4,000-plus units, and was valued at $534 million. Berkadia arranged the Freddie Mac acquisition financing for the entire transaction, and Cushman & Wakefield represented the sellers for the first tranche.

This large acquisition is a culmination of months of negotiations, due diligence, research and financial structuring. We are extremely pleased to have such leading institutional investors join us in this extensive portfolio. This is one of the largest real estate transactions in the country since the COVID outbreak,” said Kip Sowden, RREAF’s chief executive officer. RREAF has acquired approximately $1 Billion of real estate assets in the last 12 months.

Impacting the crisis of affordable workforce housing is at the heart of DLP Capital’s mission,” said Don Wenner, chief executive officer and founder of DLP Capital. “This portfolio of communities will provide safe and comfortable homes to thousands of working families, and we are excited to work together with partners that align with our mission and purpose. We can do good while doing well for our investors.” DLP Capital has approximately $2 Billion of assets under management.

Jonathan Roth, managing partner and co-founder of 3650 REIT, stated, “The Sun Belt region of the country continues to see in-migration from higher cost-of-living areas, creating a continued need for well-located, attainable housing in the region. This transaction aligns perfectly with 3650’s investment thesis and focus on properties with long-term potential, and we look forward to a successful relationship with sponsors RREAF and DLP Capital, both market leaders in multifamily in the Southeast U.S.” 3650 REIT, which is taking a preferred equity position in the transaction, manages in excess of $4 Billion in investments.

“We began working on this portfolio with RREAF day one and explored all financing avenues available including SASBY executions and structured products from many of the largest investment banks in the space,” said Nathan Stone, managing director, Berkadia Dallas. “After weighing all options, Freddie Mac emerged as the ideal partner for RREAF in this transaction and we are pleased that RREAF trusted Berkadia’s experience and ability to execute on a transaction of this magnitude. With the closing of this portfolio, we will have closed 34 loans with RREAF in a 14-month period with loan balances totaling over $647 million. This is a testament to the professionalism of Kip Sowden and the whole RREAF team. We couldn’t ask for a more responsive and reputable client.”

Taylor Bird, Andrew Brown and Jaime Slocumb of Cushman & Wakefield represented the sellers in the transaction. “This portfolio is located across the Sunbelt in several high growth markets with proven value-add stories, strong demographics and access to major employers,” Bird said. “The portfolio’s value-add make-up fits the ideal profile of an asset class that has outperformed during the pandemic. As the result of the successful relationship, this portfolio accounts for the 26th transaction closed with RREAF on both the buyer and seller sides.”

The closings occurred in mid-September, and RREAF is beginning to implement significant capital improvements across the portfolio as part of their strategic value-add business plan.

RREAF Residential, a wholly owned subsidiary of RREAF Holdings LLC, and DLP Capital will serve as property managers for all 21 communities. Both management firms provide marketing, maintenance, leasing, and other resident services for tens of thousands of apartment homes around the country.