Dallas-based S2 Capital continues to bet big on its home state with the recent acquisition of four multifamily communities. According to the multifamily investment firm, this brings its total number of units in the state to 16,000.
The four properties, totaling 1,893 units, include the 662-unit Hyde Park at Monfort in Dallas, the 347-unit Twin Creeks Crossing I and the 330-unit Twin Creeks Crossing II in Allen, and the 554-unit Tintara at Canyon Creek in Austin.
At Tintara at Canyon Creek, S2 plans to spend more than $7.2 million on renovations, including upgrades to the swimming pool, the leasing office, the gym, flooring, appliances, and countertops. At Hyde Park at Montfort, it will spend more than $6.6 million on renovations, including upgrading finishes to balcony fencing and railing, landscaping, and the swimming pool as well as implementing new flooring and materials in the interiors.
“When COVID first hit, S2 quickly recognized that the market trends we witnessed in Texas and the Sun Belt pre-pandemic were going to dramatically accelerate in a post-pandemic environment,” said CEO Scott Everett. “The 10-year Treasury spread to cap rates jumped 300 basis points overnight, and we started buying as much as we could handle. I’m very proud of our team’s ability to acquire 13,000 units totaling $2.5 billion in the past 24 months, and we have no plans of slowing down.”
Taylor Snoddy, James Roberts, and Philip Weigand of NorthMarq’s Dallas investment sales team represented the seller in the transaction, which closed at the end of September. NorthMarq’s Dallas debt and equity team, including executive vice president and executive managing director Jeffrey Erxleben, senior vice president Lauren Bresky, vice president Kevin Leamy, and investment analyst Loren Heikenfeld, arranged floating-rate debt tailored to the sponsor’s business plan.
“This was a true team effort for TKG/Provident, S2 Capital, and NorthMarq,” said Roberts, senior vice president. “The seller had amassed a sizeable portfolio of assets spanning multiple markets and product types, which was very appealing to S2. This sale rounds out over $1 billion for our Dallas team in September, which speaks to investor appetite for multifamily in Texas.
Founded in 2012 to specialize in value-add multifamily properties, S2 has $1.1 billion under contract to sell by Dec. 1 across 21 deals resulting in a blended net internal rate of return for its investors of 41%. According to the firm, it will be transacting on $4 billion across 54 deals in 2021.