RALEIGH, NC – Officials of The Preiss Company (TPCO), ranked the nation’s fifth largest, privately-held, student housing owner-operator, announced that it continues to build on its record 2016 growth with the acquisition of Cabana Beach Gainesville and Cabana Beach San Marcos, two student housing communities totaling a combined 2,232 beds for an undisclosed amount. The two communities, serving the University of Florida and Texas State respectively, will be renovated and repositioned in their respective markets.

“These acquisitions with a new joint venture partner play to another one of our core strengths: adding value through strategic upgrades and repositioning,” said Donna Preiss, founder and CEO, The Preiss Company. “TPCO has a proven record in both in-depth renovation and development. We’ve overseen more than $30 million in construction/upgrades over the past three years. Only a handful of student housing owner/operators have the extensive experience and expertise in this sector of our business.”

Cabana Beach San Marcos

Located just off the Texas State University campus, the 744-bed Cabana Beach San Marcos sits on 19 acres and provides the latest in student resources. Community amenities include a swimming pool, sand volleyball court, dog park, regulation-sized basketball court, computer lab and study rooms.

All units are fully furnished with private bedrooms and private bathrooms. Additionally, units come with a full kitchen with oven, refrigerator, dishwasher, microwave, full-size washer and dryer, private balconies/patios, as well as wood-style floors in the common areas.

TPCO plans to upgrade 114 units, totaling 306 beds, and to renovate the community’s clubhouse. “The Cabana Beach San Marcos is a prime value-add addition to our continually growing student housing portfolio,” Preiss noted. “We secured the property at below replacement cost, and the market has seen approximately five percent rent growth in recent years, making this a particularly attractive investment.”

Cabana Beach Gainesville

Situated roughly a mile from the campus of the University of Florida, the 1,488-bed Cabana Beach Gainesville is housed on 55 acres. Each fully equipped apartment unit provides a flat-screen television, coffee and end tables, sofa, couch, dining table and fully furnished private bedrooms and bathrooms. Rooms also provide full-sized washer and dryer, alarm systems and private balconies/patios. Community amenities include a beach clubhouse, resort-style waterfall pool, sandy beach tanning zone, 24-hour fitness center, sand volley ball courts, grilling stations, computer lab, study rooms and a gated entrance. The pet-friendly community also hosts weekly resident events.

TPCO is plotting to renovate common areas, as well as units, and expects to makeover the building exteriors with power washing and/or new paint, new fencing, upgraded gutters and new window screens.

“The Cabana Beach Gainesville will benefit from capital infusion and a renewed focus on rental growth,” Preiss stated. “TPCO’s business plot is to double down in markets with solid fundamentals and in which the company already has a successful presence. Both of these assets are in alignment with that plot. We currently are in both markets with assets that have experienced 100 percent occupancy, as well as above average rental rate growth.

“We loved record growth last year and are on target to challenge that record in 2017. Our national pipeline remains full, and we continue to have an appetite for further growth with a continued positive outlook for the industry,” Preiss concluded. “TPCO targets markets in the 5 largest student housing states, and Texas and Florida are the two largest student housing states in the U.S. With these two buys, TPCO will own and/or manage approximately 4,500 beds in Florida and more than 5,300 beds in Texas.”

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MINNEAPOLIS, MN – Calvera Partners, a California based private real estate investment firm, bought Grant Street Commons, an 85-unit, 8-tale, apartment building located at 515 E. Grant Street in downtown Minneapolis, MN for $11.375 million ($133,800/unit). The property is in an emerging downtown Minneapolis neighborhood, and walking distance to the new Minnesota Vikings stadium, light rail transit, and major downtown employers, with fantastic freeway access. The deal is the first in Calvera’s national expansion into emerging urban markets.

Calvera improves each community in its portfolio with a rebranding and repositioning strategy that is unique to each asset and draws inspiration from the boutique hotel industry. Calvera will give Grant Street Commons a new, unique design/brand and will implement strategic physical improvements to the common areas and unit interiors to provide its community members with a more modern experience while still providing a value relative to recently built apartment buildings in the downtown market.

“We’re looking forward to rebranding and repositioning the property to better compete in the dynamic downtown market,” said Brian Milovich, Managing Principal at Calvera Partners. “This won’t be a cookie cutter renovation. The design and brand will be authentic and bring this 1980s building into 2017 and beyond. We’re going to provide an outstanding value-oriented product that brings positive attention to the neighborhood.”

In addition to its demographic makeup and desirable urban living, Minneapolis-St. Paul is attractive to investors. Major city attractions include Target Field, US Bank Stadium, five art museums, the award-winning Guthrie Theatre, 49 regional parks and park reserves, The Mall of America and the nearly 50,000 student population at the University of Minnesota. According to a recent New York Times article, the city had the third highest increase in density, just behind Chicago and Seattle, from 2010-2016 out of the 51 metros with more than 1 million people in the country.

“We chose Minneapolis as our first city outside of California because we reckon the Twin Cities is still a well-kept secret across the country,” said Milovich. “It is densely populated, showing steady growth, has major attractions and large businesses, and most importantly, a desire for urban living. The city and developers alike have invested millions of dollars in East Town. We can see that progress heading south on Portland Avenue and want to be part of that evolution.”

This is Calvera’s first acquisition outside of the San Francisco Bay Area and the first acquisition in its fully-discretionary real estate investment fund. Concurrent with the acquisition, Calvera is opening an office in the Twin Cities and seeking additional investments in the Minneapolis-St. Paul metro area, in addition to other markets across the country.

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SACRAMENTO, CA – Decron Properties has traded a 264-unit multifamily property in Sacramento, CA and cash to Sequoia in a direct exchange for a two-property 504-unit apartment portfolio in Simi Valley, CA in a transaction valued at $193 million.

“A direct exchange is highly unusual and had never been executed by either Decron or Sequoia and a lot of pieces needed to fall into place in order for this transaction to occur,” said Decron Vice President of Acquisitions & Finance Daniel Nagel.  “It started with Institutional Property Advisors (IPA) representing both parties in their respective sales. When we learned that Sequoia Equities was as interested in our Sacramento property as we were in their Simi Valley portfolio, we questioned the brokers to find a creative way for both companies to achieve their business goals at a time where deal volume has slowed significantly and inventory has become extremely limited.” 

“This could have never worked if we had not previously closed multiple transactions with both Decron and Sequoia,” said Stan Jones, IPA executive managing director “Both firms have a fantastic reputation and are active buyers in the marketplace. Putting the two transactions together while understandable was fraught with risk.  We are pleased at the result and our ability to help two vital clients achieve their investment goals.”

While the transaction took no more than 70 days to complete, the complexity of the deal required more than 15 lawyers across five law firms to close. 

Decron bought the 372-unit The Villas and the 132-unit Overlook located on Country Club drive within one-half-mile of each other in the 4,000-acre master plotted community of Wood Ranch. Together the properties represent the largest multifamily asset in Simi Valley, a bedroom community 45 miles north east of downtown Los Angeles.   

Both highly amenitized properties were built in 1986 and feature one- and two-bedroom floor plans that cater to young working professionals that have been priced out of home ownership in the affluent suburban Ventura County neighborhood where the median home price is $762,000.  The Villas boast two resort-style swimming pools, two tennis courts, and a putting green on a 15-acre site.  The Overlook includes a swimming pool and spa, fitness center, and sports court on a low-density eight-acre site. 

Serving a population of more than 162,000 the inventory of multifamily housing in the Simi Valley/Moorpark submarket totals only 6,523 units, according to IPA.  Of the 702 units in the construction pipeline only 102 are entitled.

“The Ventura County economy continues to be driven by strong job growth in high-tech, clean energy, and healthcare,” added Greg Harris, IPA executive managing director. “Highly educated professionals are migrating to the area from Los Angeles and beyond, for the jobs, fantastic schools and quality of life, but are finding quality affordable housing options hard to come by in one of the most supply constrained multifamily markets in Southern California. The confluence of demand drivers and limited supply makes a compelling value-add tale.” 

Sequoia took title to Broadstone at Strawberry Creek, a 264-unit gated apartment community in the Sacramento suburb of Elk Creek. Broadstone was Decron’s first investment in Northern California when they bought the property in June 2012.  

“This was an brilliant investment that performed very well for us over the five-year hold period,” added Nagel.   “While Sacramento continues to boast sound market fundamentals for multifamily investment, we were operating inefficiently because we only had one asset in the submarket. The equity from the sale of Broadstone is being deployed to meet our current strategic focus in more core California markets adjacent to major employment centers which includes first ring submarkets around Los Angeles, Orange County, San Diego, Silicon Valley and East Bay (Contra Costa and Alameda County) where we believe sustained rent growth can be achieved over time.

Stan Jones, Philip Saglimbeni and Salvatore Saglimbeni in IPA’s Palo Alto office along with Gregory Harris, Kevin Green, and Joseph Grabiec in the firm’s South Bay/Encino office represented Decron and Sequoia in the complex transaction. 

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