- What Investment titan is buying 23 properties from Starwood Capital
- Why The biggest concentrations are in Florida and Texas
- What’s next Brookfield plans to spend $100m on renovations
Brookfield has agreed to pay US$1.55bn for a 7,300-unit apartment portfolio concentrated in Florida and Texas, Green Street News can reveal.
The investment behemoth is buying the 23-property package from Starwood Capital, which evidently pieced the portfolio together over the last five years. The deal values each apartment at US$212,000.
It’s not clear if Miami Beach-based Starwood hired a sales broker for the deal.
The 95% occupied properties are spread across 11 markets in six states, with the biggest chunk in Florida (10 properties) followed by Texas (5) and Colorado (3). The rest are in Arizona, Georgia and Utah. The largest market concentrations are South Florida, Denver, Tampa and Salt Lake City.
The average apartment is 923 sq ft, with average rents of US$1,663, or US$1.80/sq ft. The properties were built from 1983 to 2019, and most have one- and two-bedroom apartments, with some containing studios and three-bedroom units. Part of the appeal of the portfolio is that all of the properties are near demand drivers for tenants, including universities and medical centers.
Starwood has spent some US$90m since 2019 to improve the properties, but Brookfield plans to pump another US$100m into unit renovations and amenity upgrades over the next five years.
The deal is the latest large apartment portfolio in play. Despite a drop in valuations and a slowed investment-sales market, the string of deals indicates that institutional investors are regaining confidence in the sector.
This month, KKR agreed to buy a 19-property student-housing portfolio from Blackstone for US$1.64bn. And last month, Blackstone struck a US$10bn deal to acquire Denver-based Apartment Income REIT, which operates as AIR Communities.
Toronto-based Brookfield is buying the properties via its Brookfield Strategic Real Estate Partners 5 fund. That vehicle, expected to raise some US$15bnof equity, has closed on US$8bn.