Florida-based American Landmark Apartments and its equity affiliate, Electra America, have closed its 2018 Multifamily Fund II after filling it with $462 million. The firm also has announced the launch of Multifamily Fund III by setting a target of $500 million.
American Landmark has been putting the money to work by acquiring thousands of apartment units in Florida, Georgia, North Carolina, South Carolina, Tennessee, and Texas. The company’s bread-and-butter acquisitions skew to the value-add side of things in markets that are already preheated.
“We will stay the course in 2019 and continue to focus on Sun Belt cities where the demand for workforce apartments—particularly Class A-minus and Class B product—is strong and where rents are growing faster than the national average,” says Joe Lubeck, CEO of American Landmark and Electra America. “Jobs, jobs, jobs is our mantra. American Landmark focuses on areas with high job and population growth.”
After zeroing in on the desired geography, the firm looks for specific fixer-upper opportunities. The improvements made depends on what is already in place. “They run the gamut, and it varies from property to property,” says Lubeck. “Almost all of the properties we acquire will receive some interior upgrades to units. We add things like stainless steel appliances and granite countertops to create a more luxurious feel, and also add some more modern features like USB plugs.”
The exteriors are also slated for makeovers depending on what’s lacking. “We’re adding bark parks and pet washing stations, resort-style furniture to the pool area, free Wi-Fi throughout the community, state-of-the-art fitness centers with on demand virtual trainers, and easy-access package lockers so people can pick up their packages any time of the day,” says Lubeck.
The funders for Electra America’s projects include private investors as well as institutional investors, such as Psagot Investment House, Bank Leumi, the pension funds of Bank Leumi employees, IBI, the Gilad Pension Fund, universities, insurance companies, and other pension funds.
According to Lubeck, looking for investors isn’t that difficult as they usually come to him. “We’ve established a storied reputation that connects us with investors worldwide, most of whom seek us out,” he says. “Building and maintaining relationships with them is also important, as we’ve cultivated long-term and repeat investors in the process.”
The firm must be doing something right as Lubeck and his partners have bought and sold over 100,000 apartment units valued at over $8 billion since 1996. American Landmark’s portfolio of 28,000 apartment units is currently valued at roughly $4 billion.
