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March 11, 2014
Kenco's Third Generation On Expansion Spree
After 50 years, long-time Atlanta apartment family Kenco is ceding control to a new generation. (It's kinda like that show Dallas except it's in Atlanta and it's not crazy.) It's taking on debt for a shopping spree that could spread through the Southeast.
We sat down this morning with Kenco's Doug Linneman, Clay Edwards, and Clayton Edwards (Clay's son). Kenco is on a shopping spree after more than 30 years of holding on to a small Atlanta portfolio of '60s-gen apartment complexes and little else. (Like most middle-aged companies, you realize you've worked hard for long enough, so go buy a Porsche.)
Kenco has come out of the box swinging this year when Clayton, 29, rejoined his father's company after a stint at UGA business school. The firm purchased Walden Pond, a 124-unit apartment complex in Woodstock (here, no relation to Thoreau's, but you don't have to be in Massachusetts to be self-reliant) and Marietta SommerPointe, a 144-unit complex in Marietta from RADCO. That was after selling a slew of legacy properties, including in Tucker, Buford and North Shallowford, the latter of which sold to Cock-Finklestein to free up some investment cash (see our story here). Clay says it was hard to part with those properties when “you kind of get married to something.” We enjoyed the father/son banter this provoked: Clayton: “Debt's a good thing!” Clay: “That's been hard to accept.” Clayton: “I'm comfortable taking on more risk because of my age though.”
Even with debt, buying multifamily in today's market with conservative underwriting is a lot easier said than done. Last year, Kenco underwrote 50 properties. It only bought one (Sommerpointe, here). Clayton says they're seeking '70s/'80s vintage apartments (somethin' groovy, man) that have seen significant renovation, and where they can add value by stricter management and raising rents. That M.O. means--unlike many of its competitors--Kenco is looking in suburbia. Nonetheless, “you have a lot of competition,” Clayton says. The firm is targeting some 400 units to buy this year, and hopes to own more than 1,000 by next year, when it will start looking for buys in Athens, Nashville, Charlotte, and beyond.
We took a moment with Clay, who showed off an impressive display case of WWII mementos and artifacts gathered by his Clay's father, Kenco founder Ken Edwards, who served in the Marines at Saipan and Tinian. Clay has another love--one his son's not forcing him to sell either: He's an avid gearhead, and owns a collection of vintage cars, including a 1969 Oldsmobile 442, 1970 Buick GSX, 1971 Formula Firebird, and a 1972 Chevrolet Chevelle SS.
Dividend Unloads ATL Warehouse
We just got word--thanks to an SEC filing--that CBRE's Chris Riley, Brian Budnick, and Frank Fallon just participated in a huge multistate industrial transaction for Dividend Capital Diversified Property Fund. Dividend just unloaded a portfolio of 12 industrial properties encompassing some 3.4M SF and 98% occupied to a fund managed by JPMorgan for $175M. Among those properties was 130 Greenwood Industrial Pkwy, a 491k SF warehouse leased to The Sports Authority, Chris (seen here on right with Hartman Simons' Summey Orr during a 2012 Bisnow event) tells us.
Whitmire, Latshaw Head To Uganda
Where are you going on your Spring Break? Bull Realty's Rob Whitmire and Daniel Latshaw decided to soak up the sun in Uganda. Yes, Uganda. We got this pic of the duo arriving for a nine-day church lecture tour in the African country and meeting “hundreds of children at two orphanages.” We'll try to pry more stories from Daniel and Rob when they return.
New Bisnow Education Video!
By popular demand, we've just released a second video we did with Peter Linneman, widely considered the top professor of commercial real estate in the US. This new video is called "Real Estate Finance," i.e., on how you get money to do deals. Although an advanced topic, it's purposely very simple to understand. It's 77 minutes, broken into 5-minute increments, so you can watch or listen as you are waiting in line, or at the gym, or lying in bed. (To each his own.) Click here for the new video and here for the old video.
It's that time of year! Keep track of yourself on your Spring Break this year and send pictures to Jarred@Bisnow.com.