Investcorp Acquires 11 Multifamily Properties for $370M from Equus

by Betsy Kim, Globest.com
Investcorp acquired 11 new, multifamily properties totaling 2,615 units for approximately $370 million from Equus Capital Partners, Ltd. This deal marks the alternative investment manager’s largest US real estate portfolio acquisition in more than a decade. Its real estate team on the deal is located in New York City.

“As one of the most active investors in U.S. multifamily real estate, our real estate investment business continues to be an important driver of our ambitious long-term global growth strategy on the path to $50 billion in AUM,” says Mohammed Alardhi, Investcorp’s executive chairman.
The portfolio assets are located in major US metropolitan areas where Investcorp has made previous acquisitions. The properties are located in Orlando, FL; Tampa, FL; Raleigh, NC; Atlanta, GA; Philadelphia, PA; and St. Louis, MO.

The portfolio was 95% leased at the time of the sale. On average the properties were constructed in 1994 and have an average unit size of 1,020 square feet. The properties are located in diverse, multiple growth markets and submarkets with opportunities for value-add renovations.
Michael Moriarty, principal in real estate investment at Investcorp, notes his company continues to see significant investment opportunities in US multifamily, describing it as a well-performing, highly liquid asset class benefitting from the strength of the US economy and labor market.

“Similar to many of our other recent multifamily investments, the assets in this portfolio are appealing because they are located in metro areas that are either key growth markets or population dense areas with new supply constraints,” says Moriarty.

The private equity real estate fund manager Equus, which is headquartered in Philadelphia, PA, acquired the properties between 2013 and 2015. It spent over $20 million in renovations, upgrades and enhancement of shared amenity spaces. An Equus affiliate, Madison Apartment Group provided the on-site management and leasing and oversaw the capital improvement program. Madison will remain the on-site property manager of the portfolio for Investcorp.
“[T]he portfolio is positioned to deliver an attractive, stable and predictable cash flow for the new venture with Investcorp while at the same time the markets continue to support further enhancement opportunities and ability to push rents higher,” says Christopher Locatell, SVP and director of dispositions for Equus.

Locatell, along with Joseph Mullen, Kyle Turner, Steven Pogarsky, Nicoletta DeSimone, Peter Naccarato represented Equus in-house. HFF’s Michael Joseph, Matthew Lawton and Stella Pappas also provided representation for Equus. HFF’s debt team, Mike Tepedino, Mike Gigliotti and Mona Carlton secured financing for Investcorp.

Having acquired approximately 7,700 units, Investcorp ranks as a top-10 buyer of U.S. multifamily units in the last year, according to Real Capital Analytics. Investcorp reports since 1996, it has acquired more than 600 total properties with a combined value of more than $16 billion.
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