Los Angeles-based real estate investment firm JRK Property Holdings has started to deploy its latest $1 billion multifamily value-add fund. The first acquisition through JRK Platform V, which targets higher-quality, well-located multifamily investments built after 1990, is the Residences at Park Place, a 258-unit luxury mid-rise apartment and townhome community in Leawood, Kansas, from VanTrust Real Estate. The firm also is under contract to purchase a luxury high-rise community in downtown Sarasota, Florida, from a separate seller; and that transaction is slated to close in March.
“We’re thrilled to have begun deployment of our latest fund with two institutional quality assets located in preeminent locations within rapidly growing markets for north of a 5.5% cap. Not only are our investors stepping into an exceptional basis with attractive long-term, fixed-rate financing, but the tremendous location and quality of these assets will insulate them from additional cap rate expansion,” said JRK president Daniel Lippman. “Further, there remain significant operational and physical value-add opportunities we plan to capture through a renovation and JRK’s management.”
According to JRK, it leveraged the acquisition of Residences at Park Place with attractive long-term financing at a fixed-rate of 4.78% over the entire term from Fannie Mae, arranged by Annie Rice, managing director in the Los Angeles office of JLL Capital Markets. JLL’s David Gaines, Jim Gates, and Adam Tilton in the firm’s Chicago and Kansas City offices represented the seller in the transaction.
“The dramatic rise in interest rates has created a negative leverage environment, which has made it difficult to transact over the past year,” said James Broyer, JRK president of investments. “We have remained patient and disciplined during this period of market dislocation, and, as we begin to see the headwinds subside, we are able to acquire these outstanding assets with positive leverage to borrowing costs resulting in attractive yield for our investors from day one.”
The community, which was 98% leased at closing, was built in phases between 2014 and 2019 by the seller and is the residential component of Park Place Village, a master-planned, mixed-use development in the Kansas City, Missouri, affluent suburb. It features three mid-rise buildings with one-, two-, and three-bedroom apartments and a separate four-story building with one- and two-bedroom loft units. Residents have access to a saltwater swimming pool with a resort-style outdoor cabana and grilling area; media and game rooms; co-working space; and two 24-hour fitness facilities with a massage room, a Peloton bike, a fitness on-demand center, an infrared sauna, and customized concierge services.
JRK, through its predecessor funds, owns and operates $7 billion in multifamily assets with a portfolio spanning 26 states and over 30,000 units.
