Investment firms buy 2 Arkansas properties in $500m apartment deal

A trio of investment firms led by a Dallas-based firm RREAF Holdings have reached a $500 million deal to acquire 10 multifamily properties across seven states. Glen at Polo Park in Bentonville and River Pointe in Maumelle are part of the deal.

The big picture: Investors see the promise of economic growth in the South as workers migrate for jobs, affordable housing, quality of life and warmer climates.

  • Inflation, growing demand and investors seeking to maximize their profits have driven up rents in recent years.

Enlarge: Only 2.3% of NWA’s available rental properties were vacant as of June 30. Prices have increased by 18% from the beginning of 2021 to the middle of this year to reach an average of $860.

Between the lines: Fannie Mae predicted in July that rents decrease slightly in the second half, while noting that demand would remain strong.

  • The median rental price in the United States fell in August for the first time since November 2021.
  • Yes, but: Rising mortgage rates could discourage home buying and encourage more people to rent, which would keep prices high, Emily Peck of Axios writes.

Details: Other properties in RREAF’s portfolio are in Georgia, Indiana, Mississippi, Oklahoma, and North and South Carolina. In total, there are 2,744 units in the transaction.

  • They are collectively 93% occupied and located in capitals or university towns.
  • The investment group, which includes DLP Capital and 3650 REIT, told Axios it intends to upgrade the properties, all built between 1998 and 2012.

What they say : “We hope to get a return on this additional capital investment based on each resort’s location and tenant profile, and ensure it is affordable for customers,” RREAF CEO Kip Sowden told Reuters. Axios.

  • “There’s been a huge growth in rents…because demand far exceeds supply and we really don’t see that supply catching up with that demand,” Sowden added.

Rollback: The same group purchased 21 properties for $543 million last November, including one in Russellville, Van Buren and Arkadelphia.

  • Nine of those properties were in Georgia.

What we are looking at: The multifamily industry estimates that the United States will need 4.3 million additional apartments by 2035 to meet demand.