TruAmerica Multifamily, a Los Angeles-based multifamily investment firm, has acquired seven multifamily properties from Philadelphia-based Equus Capital Partners, it announced yesterday.
The firm, which manages a $4.3 billion portfolio, bought 1,829 units for $255 million across suburban Seattle, Portland, Oregon and Salt Lake City, Utah. TruAmerica plans to spend more than $30 million to upgrade the properties' interiors and exteriors. The acquisition is part of TruAmerica's push to double its Pacific Northwest portfolio by the end of the year, to more than 6,000 units.
Institutional investors in the purchase included insurance giant Allstate and Guardian Life Insurance, TruAmerica's majority owner, and a foreign insurance company.
The firm's strategy is focused on suburban properties close to growing urban markets, with 80 percent of transactions outside city centers. The properties cater to young families seeking both space for housing and accessibility to big-name employers. Unlike much of the high-priced development in the area, TruAmerica chief executive officer Bob Hart told PERE these properties are built for the working class, with rents in the $1.30 per square foot to $1.50 per foot range, rather than $2.75 per square foot to $3 per foot.
“A lot of our tenants are blue and gray collar type folks working in the service industries,” Hart said in an interview. “Our demand levels are very, very high.”
The CEO said the previous owner managed the properties well, but did not value upgrades. TruAmerica will spend more than $30 million renovating the properties' interiors and communal amenities, such as clubhouses, fitness centers and landscaping.
This latest acquisition continues to increase TruAmerica's Pacific Northwest presence. The firm has invested more than $500 million in the area since June. Hart said the area benefits from diverse job creators, from coffee giant Starbucks to planemaker Boeing.
Pacific Northwest data point to Hart's conclusions: Seattle's unemployment rate was down to 3.6 percent in August, and Portland's vacancy rate is 3.1 percent. Hart said TruAmerica has other area deals in the works for 2015's fourth quarter.