Nationwide commercial real estate investment firm 3650 REIT has invested in two portfolio transactions involving multifamily assets worth more than $1.2 billion.
The firm, which originates and services portfolio loans for relationship borrowers as well as other strategic investments, most recently provided $93.5 million of preferred equity to recapitalize the 12-property Southern Portfolio with more than 3,500 apartments in the Southeast. The Southern Portfolio is owned by a joint venture between Onyx Partners, headed by CEO Jeremy Rieder, and David Werner Real Estate.
3650’s preferred equity investment is subordinate to existing Fannie Mae senior mortgage loans. The capital contribution will recapitalize existing preferred equity and provide additional capital for renovations at the properties.
The firm also recently provided $89 million of preferred equity to RREAF Holdings for the acquisition of three separate multifamily portfolios, the Transcoastal Portfolio, totaling 21 properties with more than 4,000 apartments in the Southeast.
Both of these investments mark the first two significant deals from 3650’s preferred equity investment program, led by managing director Michael Fleischer.
“In light of the ever-shifting landscape of commercial real estate and its asset classes, it is critical that our investment strategy constantly evolves to reflect current market conditions,” said 3650 co-founder and managing partner Jonathan Roth. “The multifamily housing market in the Southeast and Sun Belt regions remain supply constrained, and these transactions reflect 3650’s commitment to investing in attainable housing and helping to improve the existing housing stock in these markets.”
For the Southern Portfolio, which includes The Saulet—one of the largest multifamily properties in New Orleans, Drew Anderman and Eddie Haber of Meridian Capital Group arranged the recapitalization.
Amenities currently feature in the portfolio include high-end appliance packages, in-unit washers and dryers, balconies, walk-in closets, swimming pools, playgrounds, clubhouse, fitness centers, business centers, and storage units. Some of the communities also feature sports courts, dog parks, nature trails, garage parking, and gated access.
“The 3650 team was instrumental to getting this extremely complicated multi-party transaction closed, and we look forward to this being our first of many transactions together,” said Werner, founder of David Werner Real Estate.