LOS ANGELES, November 1, 2016 — TruAmerica Multifamily in joint venture with institutional capital partner Investcorp has acquired The Highlands, a 556-unit garden-style apartment community in the Inland Empire community of Grand Terrace, CA in an off-market transaction valued at $92 million.
This is Investcorp’s fifth and largest investment with TruAmerica over the past 24 months. Together, Investcorp and TruAmerica now own and operate more than 2,400 units in California, Arizona, Colorado and Nevada.
“The Highlands represents a particularly attractive acquisition with several compelling value-add strategies, including tiered interior renovation packages designed in response to market demands,” said Brian Kelley, Managing Director with Investcorp’s Real Estate Group. “TruAmerica is a trusted operating partner that has significant experience in successfully repositioning similar assets in this submarket, and we are confident in their ability to do the same with The Highlands.”
TruAmerica’s footprint in the Inland Empire totals 1,665 units across seven properties.
“With our existing presence in this market, we will be able to achieve synergy through economies of scale and by leveraging existing operational experience,” said Greg Campbell, Senior Managing Director, Acquisitions and Dispositions for TruAmerica.
The Highlands, built in two phases between 1986 and 1988, features a mix of one- and two-bedroom floor plans, each with a patio or balcony. Each unit includes a modern energy efficient kitchen, full-size washer and dryer, ceiling fan and a private garage. Community amenities include a clubhouse with a screening room and business center, four resort-style swimming pools, 24/7 fitness center and children’s playground.
The partnership’s multimillion capital improvement program will include upgrades to the unit interiors, exterior and common area amenities.
“Because of the excellent condition and aesthetic appeal of the property, our primary focus will be on improving the unit interiors with such things as appliance packages, new shaker style cabinet faces and carpet,” added TruAmerica Chief Operations Officer Lynn Owen. “In order to appeal to a diversified renter pool, approximately half the units will be upgraded to an even higher specification with stainless steel appliances, dark vinyl-wood flooring, drop lighting, and new brushed nickel hardware. Members of our construction management team are already on site developing a comprehensive and detailed plan for the renovation,” Owen said.
The Inland Empire is the largest recipient of population influx as people exit the much higher cost-of-living areas of Los Angeles, Orange County and San Diego. As the median price of single-family homes continues to rise, this inland demographic shift is bolstering an already strong rental market, especially in the Loma Linda/Colton/Riverside metro markets.
The Highlands is located 60 miles east of downtown Los Angeles in the Colton/Loma Linda submarket, where vacancy rates are expected to average 1.7% over the next five years, compared to a forecasted 2.5% for the Inland Empire as a whole. Additionally, with limited multifamily construction in the immediate area, apartment fundamentals should remain positive for the foreseeable future.
The Investcorp/TruAmerica investment will benefit from long-term, floating rate, agency debt financing which should generate attractive cash-on-cash returns for its investors. The financing was arranged Charles Halladay and Mike Gigliotti of HFF.
About TruAmerica Multifamily
TruAmerica Multifamily is a vertically integrated value-add multifamily investment firm based in Los Angeles. Founded in July 2013 as a joint venture between Robert Hart and The Guardian Life Insurance Company of America, TruAmerica has been one of the country’s most active multifamily investors and manages a $6.5 billion portfolio of approximately 31,000 units across prime locations throughout Northern and Southern California, Washington, Oregon, Colorado, Arizona, Nevada, Utah and Maryland. For more information on TruAmerica Multifamily, visit www.truamerica.com or call (424) 325-2750.
Investcorp is a leading provider and manager of alternative investment products and is publicly traded on the Bahrain Bourse (INVCORP). The Investcorp Group has offices in London, Bahrain, New York, Saudi Arabia, Abu Dhabi and Doha. Investcorp has three business areas: corporate investment, real estate investment and alternative investment solutions (formerly known as hedge funds). As at June 30, 2016, the Investcorp Group had $10.8 billion in total assets under management (‘AUM’), including assets managed by third party managers and assets subject to a non-discretionary advisory mandate where Investcorp receives fees calculated on the basis of AUM. Further information, including our most recent periodic financial statements, which details our assets under management, is available at www.investcorp.com.