News & Analysis

TruAmerica, Dell family office buy US multifamily portfolio

The new joint venture purchased three Baltimore-area apartment properties for $187 million in TruAmerica’s first East Coast acquisition.

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First-time partners TruAmerica Multifamily and MSD Capital, the firm that manages billionaire Michael Dell’s capital, have teamed up to buy a suburban Baltimore apartment portfolio for $187 million, the groups said Monday.

The deal is Los Angeles-based TruAmerica’s first acquisition east of Colorado. The joint venture purchased three Maryland apartment properties built between 1984 and 1990 for a total of 1,004 units. The portfolio comprises the 158-unit Bayshore Landing at 988 Spa Road in Annapolis; the 634-unit Sherwood Crossing at 6731 Old Waterloo Road in Eldridge; and the 212-unit Southfield at 4335 Bedrock Circle in Nottingham. TruAmerica plans to upgrade the interior of the apartments, the firm said in a statement.

“Similar to the West Coast markets in which we invest, substantially all of the new apartment inventory being built in the greater Baltimore area is targeted for ‘renters by choice,’ effectively pricing out the working class,” said Robert Hart, TruAmerica’s founder and chief executive, in a statement Monday. “This was a major factor in the decision to target the Baltimore and Annapolis markets for our first East Coast investments.”

Hart founded the firm in 2013 as a joint venture with The Guardian Life Insurance Company of America to reposition class B apartments. The company now manages a portfolio of more than 27,000 units worth a total of $5.4 billion, according to the firm.

MSD Capital was founded in 1998 and has been investing in real estate since 2004, according to a spokesman. Dell, the founder of Dell Inc., is worth $22 billion, according to Forbes’ 2016 The World’s Billionaires ranking. The family office’s latest publicly-available real estate transaction was the June 2015 purchase of a development site in New York’s Long Island City for $43.5 million, according to real estate data provider Real Capital Analytics. MSD Capital is partnering with local developer Adam America Real Estate to build condominiums with ground-floor retail on that development project.

“MSD Capital continues to see attractive opportunities in repositioning older multifamily assets,” said Barry Sholem, head of MSD Capital’s real estate group, in Monday’s statement.