A joint venture led by Area Property Partners with McDowell Properties has acquired a portfolio of defaulted loans worth $215 million according to a CoStar report. The JV assumed the portfolio of defaulted loans secured by 17 apartment complexes with 4,733 units in four states. Seven properties are in Austin, Texas with three other properties in Dallas, two properties in Phoenix, three in Tulsa, Oklahoma and one each in Tampa and Jacksonville, Florida. The overall occupancy rate for the portfolio is 84%, providing strong upside potential when leased to market occupancy.
"The transaction represents the rare opportunity to acquire a portfolio of assets in this dynamic high growth market at an attractive discount to the current debt basis," said Steve Wolf of Area Property Partners. "The business plan calls for taking fee title to the assets and repositioning each asset, including exterior renovations, landscaping improvements, amenity upgrades, and interior renovations. These assets will be able to compete with newer complexes in their submarkets while offering a much stronger value within their rent levels."
"These assets are being acquired at substantial discounts to replacement cost while multifamily fundamentals continue to improve. Under new ownership, we will implement a focused renovation plan combined with intensive asset management to maximize the value of the assets," said Patrick McDowell, president of McDowell Properties.
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