Cortland Partnershas purchased six communities (2,200 apartment units)in Atlanta and Dallas-Fort Worth. In three years, the firm has jumped from owning 1,900 units to 13,000. (Think of all the roommates--Cortland may be single-handedlyresponsible for keeping Craiglist running.)

Cortland CIO Mike Altman tells us Cortland is traditionally a developer, making its first purchase in 2010. But these days, value-add acquisitions are the bulk of its activity because returns are so much higher. (Like Darwin says, we must evolve. Did you know many Galapagos turtlesrepositionedtheir shells from residential to mixed use?) The latest assets were purchased at a 6.5% cap but will provide a 7.75% return on cost in 18 months, something youd be hard-pressed to replicate through new construction. The firm doesnt have an acquisition target for the year, but Mike tells us itll likely close another 2,500 units this quarter.

Here's the 360-unit Lexington Farm Apartments, one of Cortland's new assets. The acquisitions were funded in part by a new alliance with two institutional partners that provided $200M equity to purchase communities in Texas and the Southeast. Mike tells us the next few deals will likely come from North Florida and Texas (hed love to enter San Antonio), but hes also hoping to buy in Nashville and the Carolinas. Mike says REITs are providing lots of deals, including five of these six. As they flock to the core gateway markets, theyre leaving well-maintained, quality assets available. The best part: These properties typically can benefit from a localized approach to management, creating a value-add opportunity.