Dallas-based Behringer Harvard Multifamily REIT I made a big splash in September, buying four deals totaling 1,389 units.
“It’s been a pretty hectic acquisition phase,” says Jason Mattox, chief administrative officer with Behringer Harvard. “Each real estate deal stands on its own. Often times the real acquisitions can take a while to put together. These were acquisitions that we had in the hopper for a variety of lengths of time.”
The buys consisted of 390 units at Waterford Place in Dublin, Calif.; 253 units at Mariposa Loft Apartments in Atlanta; 438 units at The Gallery at NoHo Commons in Los Angeles; and 308 units at Burrough's Mill Apartment Homes in Cherry Hill, N.J.
“The fact is these were attractive in great locations with the right amenity package that met with the goals that we had for multifamily investment,” Mattox says. “They’re close to employers, close to retail, close to restaurants, and other establishments that the resident wants to enjoy. They’re also typically transit-oriented. They’re close to rail lines or major thoroughfares—arteries that allow them to get the major work or play places very quickly.”
While the four deals weren’t necessarily distressed, Mattox says the sellers were motivated. “In most communities, the attractive buying opportunities with attractive pricing are typically associated with some concern on the part of the sellers,” he says. “They may have redemption issues they need to deal with. It may be developers that need to aggregate cash by disposing of some properties. We’re taking advantage of what’s a very attractive [buying] market right now. I think there’s motivation for a variety of sellers. They have other issues with other properties that they need to address.”
The buying spree may not necessarily be a harbinger of more deals to come, but many buyers are looking to sell solid assets because they have other problems in their portfolio, according to Dan Fasulo, managing director for Real Capital Analytics, a New York-based research firm. “We have tracked a bunch [of deals] going into contract and there is rumored to be more that we don't know about,” he says. “So the next couple of months should perk up. But we are not going to see a real pickup until some larger deals start getting done.”
Still, Behringer Harvard continues to keep looking. Right now, it has investments in 15 multifamily communities in nine states representing 4,629 multifamily units. “We are looking at major metro markets in the United States,” Mattox says. “We also may look overseas as well. We’re quite active.”