Investcorp Buys Apartment Portfolio in Sunbelt for $420M

Article originally posted on Globe St. on July 15, 2021

Investcorp has just completed a major apartment purchase. A fund managed by the company has acquired a five-property apartment portfolio totaling 2,228 units for a total of $420 million. The properties are located in Arizona, Texas and Georgia.

This portfolio is part of an aggressive acquisition strategy the firm has rolled out in the last 12 months as it has hurried to take advantage of new market opportunities created during the COVID-19 pandemic. In the last 10 months, the company has closed more than $1 billion in multifamily acquisitions and $1.3 billion in residential sales, including multifamily and student housing. The activity has grown the firm’s assets under management to more than $7 billion globally and more than $3 billion in US residential assets.

In January, the firm acquired another five-property multifamily for $330 million. The 1,854-unit portfolio includes class-B, garden-style assets in Atlanta, GA, Baltimore, MD and Jacksonville, FL, and it was 96% occupied at the time of the sale.

The US sector in particular is a key focus for the company, driven largely by millennial demand for apartment rental living. According to Michael O’Brien, co-head of North America real estate and head of residential vertical at Investcorp, the company has capitalized on growing markets with favorable economic trends.” This most recent transaction is evidence of that strategy.

Investcorp is focused on more than multifamily. The company is also aggressively expanding its industrial holdings across the US. Earlier this year, it purchased Tempe Commerce Park, a five-building, multi-tenant, light industrial park in Tempe, from BKM Capital Partners for $85.4 million. The property was 93% occupied to eight tenants at the time of the sale and features 24- to 28-foot clear ceiling heights and ample parking.

In 2014, Investcorp adopted a new investment strategy with a narrow focus on industrial and multifamily assets, and these deals reflect that strategy. However, the firm has also noted that the tremendous acquisition and disposition activity this year was largely driven by the COVID-19 pandemic, which created opportunities in both of the company’s core asset classes.