BOSTON, MA – Beacon Communities announced the acquisition of National Development Corporation (NDC), a Pittsburgh-based company with a portfolio valued at over $250 million. The acquisition includes 59 properties built in the 1970s and 80s, the majority of which are affordable.

A prolific developer and builder, NDC was founded in 1969.  Beacon Communities bought the business from its founding partners. Beacon’s strategy is to refinance and rehabilitate many of the properties in the portfolio using the low-income housing tax credit program so that the properties continue to serve as high quality affordable housing.

Beacon Communities is a full-service real estate company based in Boston.  Prior to this acquisition, Beacon owned approximately 12,200 apartments across 60 communities throughout New England, Pennsylvania, Maryland, Virginia, and New York. In August 2016, Beacon opened an office in Albany, New York as a result of the acquisition of an Albany based development company.

The acquisition of NDC adds 5,300 units to Beacon Communities’ portfolio, bringing the total units owned to 17,500. The transaction expands Beacon’s presence into a total of 14 states – adding Florida, Louisiana, Kentucky, West Virginia, and Ohio – and the District of Columbia.

The transaction nearly doubles Beacon Communities’ team, bringing Beacon’s total number of employees to more than 1,000.  With this acquisition, Beacon Communities also significantly expands its third party property management under the brand of NDC Real Estate Management, consisting of over 120 properties and 7,250 units.

This acquisition included a number of complex regulatory hurdles at the federal and state levels.

“At Beacon Communities, we pride ourselves on being at the forefront of providing high-quality, affordable housing,” said Pam Goodman, CEO. “Doubling our staff and simultaneously expanding into five new states and Washington, DC was a major undertaking and is a testament to the quality of our people as well as our reputation for getting things done.”

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SACRAMENTO, CA – Security Properties bought Sycamore Terrace, a 244-unit property built in 2006 and located in Sacramento, CA for $57,400,000.

The property was originally developed in 2006 and consists of 11 three tale residential buildings spread out over more than 11 acres. The property is located in the Pocket suburb of Sacramento, approximately 10 minutes SW of the downtown core. Sycamore Terrace is walkable to the local and high-end Nugget Markets and residents delight in quick I-5 access to employment centers in the CBD and Elk Grove.

Sacramento’s MSA continues to experience rapid in-migration and job growth in the face of a very supply-constrained multifamily market. In fact, corroborated with data from REIS, Sycamore Terrace is the only institutional multifamily property delivered in the submarket since the early 1990’s. With no plotted developments, and given land use and construction costs, it should remain as the newest construction in the submarket for the foreseeable future. This should allow Sycamore Terrace to experience positive and outsized rent growth as large and exciting projects like the Downtown Commons and the Delta Shores power center push Sacramento forward.

One of the property’s most unique features is its spacious units. At an average of 1,041 square feet, the floor plans at the property are significantly larger than its competitors. In addition, it is the only asset in the competitive set to feature 9′ ceilings and dedicated in-unit laundry rooms. Sycamore Terrace also features a 5,000+ sq-ft clubhouse and is one of only two properties in the vicinity to offer garages, both of which should offer long-lasting appeal to existing and future tenants.

Sycamore Terrace represents a value-add investment with moderate interior and exterior renovation characteristics. Security Properties plans to renovate all units with stainless steel appliances, new flooring and countertops, and a variety of other features while completing an extensive clubhouse reposition.

According to Beau Madsen, Manager at Security Properties, the acquisition was made because, “Sacramento, and this submarket in particular, is expected to outperform for the foreseeable future due to a strong and diversifying job market, population in-migration, and positive supply/demand characteristics. Through a thoughtful renovation, this asset will be well positioned to capitalize on the market’s growth while providing current and future tenants an improved renting experience.”

The property will be managed by Security Properties Residential.

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AUSTIN, TX – American Campus Communities, the largest owner, manager and developer of high-quality student housing properties in the U.S., announced that it has entered into an agreement to recapitalize and ultimately buy seven select student housing properties totaling 3,776 beds for an aggregate $590.6 million, including an exclusive option to buy a 248-bed property in Seattle, Washington, from affiliates of Core Spaces and DRW Real Estate Investments.

The portfolio investment focuses on strategic growth in seven key Power-5 conference and state flagship university markets, and offers the potential for multi-asset market efficiencies in five existing ACC markets. The transaction includes the acquisition of two existing communities, two communities opening in Fall 2017, and three projects under-construction scheduled for completion in Fall 2018, with closing and funding events scheduled to occur in a staged manner over approximately two years, allowing for optimal integration and funding.

American Campus Communities believes these seven assets represent some of the best purpose-built student housing properties in their respective markets, combining market leading unit and amenity packages with brilliant locations, with the portfolio averaging only 0.2 miles to campus. Additionally, the seven strategic growth markets offer strong student housing fundamentals with average enrollment in excess of 35,000 students and existing purpose-built student housing supply serving only 13 percent of total enrollment, as compared to an average of 22 percent for the company’s current portfolio.

As previously noted, in aggregate, the $590.6 million transaction is expected to include closing and funding events over approximately two years. The company intends to fund a substantial part of the total transaction through the monetization of select existing core assets via disposition or joint venture, thereby taking advantage of the current cap rate environment for core pedestrian student housing in tier one university markets, where private market transactions in the 4.0 to 4.75 percent cap rate range are frequently occurring.  After investment of $7.9 million of upfront capital improvements, the portfolio targets a stabilized cap rate of 5.4 percent nominal and 5.2 percent economic for the 2019-2020 academic year, with multiple property market efficiencies offering the potential for additional yield above the going-in cap rates for five of the seven assets.

“Core Spaces and DRW have developed some of the finest student housing properties in the country,” said Bill Bayless, American Campus Communities CEO. “The properties we have strategically selected in this portfolio are located in Power-5 conference and state flagship university markets that meet the highest levels of our investment criteria of differentiated products in close proximity to campus in submarkets with high barriers to entry. With the implementation of our operating platform across the portfolio, we should achieve meaningful accretion in asset value as well as additional operational efficiencies within the five markets where we have existing properties.”

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