RREAF Holdings, DLP Capital and 3650 REIT Partner in $534 Million Portfolio Acquisition
The entirety of the portfolio totals 21 multifamily communities and 4,000-plus units, and was valued at $534 million.
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.
About RREAF Holdings LLC
RREAF Holdings LLC ("RREAF") is a privately held, vertically integrated commercial real estate company based in Dallas, Texas, with roots that go back nearly 35 years in the industry. RREAF focuses its portfolio of commercial real estate projects and development under three platforms aimed primarily at catering to the middle-America workforce community: programmatic value-add multifamily acquisition, opportunistic hospitality and resort redevelopment, and core ground-up development. RREAF employs over 350 people, mostly across the South and Southeastern U.S., handling a wide range of Commercial Real Estate investment matters from 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 alliances, has built a diversified portfolio in its core competencies in excess of $3 Billion and more than 15,000 units over the past five years and expects to continue expanding these platforms. RREAF's Mission is to enhance the lives of its investors, partners, property residents and guests by providing outstanding service, excellence, and expertise, with Integrity, Vision, Values, and Purpose. For more information, please visit www.RREAF.com.
About DLP Capital
DLP Capital is a private real estate investment and financial services company focused on making an IMPACT by acquiring, developing, and building relationships, housing, leaders, and organizations. DLP Capital executes its IMPACT through a wide array of business divisions and companies including lending, investment funds, sales, leasing, property management, construction management, development, and loan servicing.
Through the Elite Execution System, as well as the company’s 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, visit www.dlpcapital.com.
About 3650 REIT
3650 (pronounced “Thirty-Six Fifty”) REIT is a nationwide commercial real estate investment firm 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 while incorporating ESG best practices. Co-Founders and Managing Partners Toby Cobb, Justin Kennedy and Jonathan Roth have played leading roles in the evolution of the CRE debt markets. Headquartered in Miami, Florida with offices in New York, Los Angeles, Dallas, Atlanta and Nashville. For more information, visit: www.3650REIT.com.
About Berkadia
Berkadia, a joint venture of Berkshire Hathaway and Jefferies Financial Group, is a leader in the commercial real estate industry, offering a robust suite of services to our multifamily and commercial property clients. Through our integrated mortgage banking, investment sales and servicing platform, Berkadia delivers comprehensive real estate solutions for the entire life cycle of our clients’ assets.
About Cushman & Wakefield
Cushman & Wakefield’s Sunbelt Multifamily Advisory Group ranks No. 1 in Sunbelt market share based on over 250 transactions and $6.2 billion in multifamily and land investment sales in 2020 (Source: Real Capital Analytics www.rcanalytics.com). Market share reflects number of sales for Alabama, Arkansas, Northwest Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee and Texas. For more information, visit https://multifamily.cushwake.com.
Cushman & Wakefield (NYSE:CWK) is a leading global real estate services firm that delivers exceptional value for real estate occupiers and owners. Cushman & Wakefield is among the largest real estate services firms with approximately 50,000 employees in over 400 offices and 60 countries. In 2020, the firm had revenue of $7.8 billion across core services of property, facilities and project management, leasing, capital markets, valuation and other services. To learn more, visit www.cushmanwakefield.com or follow @CushWake on Twitter.
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