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Multifamily Monday

Dallas-Ft. Worth

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Multifamily Monday
Talk about a Labor Day shopping spree. Mid-America Apartment Communities has been in the North Dallas area snapping up the distressed Times Square at Craig Ranch and two other properties, bringing its  Dallas portfolio up to a whopping $250M value.
 
Al Campbell
Here's MMA CFO  Al Campbell, who tells us sometimes great economic stress brings great opportunities (you didn't know Spiderman was a broker?) for disciplined companies with solid balance sheets. “We see investment opportunities still,” he tells us. Al has plans to invest a total of $350M or more this year (largely in the Sunbelt). About $200M of that is for MAA, the other $150M is for the Mid-America Multifamily Fund II (of which MAA owns 1/3 and partners own 2/3). Al says the fast-growing suburbs McKinney and Frisco are good dynamic markets with anticipated job growth.
Times Square at Craig Ranch
MAA acquired the upscale 313-unit apartment community Times Square at Craig Ranch in McKinney for $31M from the development lender, funded by borrowings under existing credit facilities and common stock issuances through MAA's at-the-market program. The bank foreclosed on the property last November. “We got this at a deep discount; probably 25-30% below replacement,” Al tells us. It was 50% leased, but the bank had to take it back, he says. “Our balance sheet is strong, so we can buy it at a good price and absorb that half-empty block for the short term.” Al says they'll likely bring in someone to manage the 88k SF of ground-floor retail.
La Valencia at Starwood
Another acquisition is La Valencia at Starwood, part of the Starwood (we should've guessed that) master-planned neighborhood in Frisco. It was stabilized at 95% occupancy, but the developer needed to move out of the development loans and they were not long-term holders. “We are,” Al says. MAA got the property at 5-10% below replacement, but because it is a stable property with strong cash flows, it was a good combination. The newly developed, upscale 270-unit apartment community was completed in 2009 and developed by Tonti Properties. The purchase price wasn't disclosed.
The Venue at Stonebridge Ranch
The Venue at Stonebridge Ranch is a  250-unit apartment in McKinney. Developed in 2000, this acquisition is part of Fund II. It's the third in the JV fund, which has a seven-year investment horizon, Al says, allowing MAA to diversify its Dallas-area investments. (Again, no purchase price.) Al says MAA has established a reputation of moving quickly and following through on their commitments. “We buy with cash and we're closing in 30 days.”