DRA, Bell exit jumbo US multifamily portfolio

A joint venture between the New York-based fund manager and the multifamily operator have sold 64 properties across the US to Lone Star for $1.8 billion.

DRA Advisors and Bell Partners have sold a portfolio of 20,439 apartment units in 64 communities across the US to Lone Star Funds in a deal valued in excess of $1.8 billion. Bell, the 12th largest multifamily manager in the US, will continue to manage the 64 communities under Lone Star ownership. Lone Star declined to comment.

“This portfolio has generated strong cash yields and has benefited from our active asset management approach throughout the hold period,” said David Luski, president of DRA Advisors, in a statement. “The end result is a great deal for our clients, with returns well ahead of expectations.”

Jon Bell, president of Bell Partners, added: “We are very pleased with the outcome of this investment. In addition, we appreciate the trust that Lone Star has placed in our operating capabilities in keeping Bell on as the manager of these communities. In this respect, this transaction is both a win for our investors and our associates.”

The 64 properties sold by the DRA/Bell partnership originally were part of a joint venture purchase of 86 apartment communities with 25,684 units made by the two firms in 2008, the largest transaction in the multifamily sector that year. In the years following the original acquisition, the two partners sold 22 communities to other purchasers, with Lone Star ultimately buying the remaining 64 assets. CBRE represented the sellers in the current transaction.

Since DRA was founded in 1986, the New York-based investment firm has acquired more than $21 billion in assets, including 42 million square feet of office space, 25 million square feet of industrial properties, more than 50 million square feet of retail space and 61,000 residential units.

Established in 1976, Bell Partners is a vertically integrated apartment investment and management company focused on high-quality multifamily communities across the East Coast and Southwest. The firm has completed nearly $9 billion of apartment transactions since 2002, including more than $2.2 billion so far this year.