PHOENIX — Berkadia has arranged the sale of a major portion of the MSI National Apartment Portfolio for a total projected sales value of more than $335 million. The apartment communities are located throughout Texas, Ohio, Louisiana, Kansas, Oklahoma and Tennessee.
To date, Berkadia has closed $239 million in sales from the portfolio, involving 18 assets across six states. In addition to the already closed transactions, the remainder of the portfolio, consisting of eight properties and 1,230 units, is scheduled to close before the end of the fourth quarter of 2014. The remaining properties are expected to close at a combined price of just under $100 million.
“The MSI National Portfolio is certainly one of the largest listed and sold transactions across such a diverse array of markets. Berkadia was well situated with national resources to execute a large, multi- channel marketing campaign on a listing of this magnitude, which resulted in a high level of interest on a local, regional and national basis; maximizing the proceeds for the stakeholders of these assets,” says Brent Long, president of Berkadia investment sales.
In 2011, the U.S. District Court placed the portfolio of 5,380 units into receivership due to distressed ownership following a lawsuit filed by the U.S. Securities and Exchange Commission against Management Solutions Inc.
Berkadia was exclusively engaged to sell the portfolio on behalf of the receiver in 2013. The properties were offered to investors as a complete portfolio, three sub-portfolios or as individual listings. In the end, Cortland Partners of Atlanta purchased the properties as a single portfolio.
George Deuillet and Forrest Bass of the company’s Austin, Texas office oversaw the portfolio and coordinated with eight other Berkadia offices to successfully market the properties nationally.
“Interest in the portfolio was very high last fall when the properties were being marketed nationally, with well over 75 legitimate letters of intent from interested, qualified purchasers,” says Deuillet. “Cortland Partners financed the acquisition with bridge financing, and is planning on improving asset performance through light property rehabilitations before refinancing with permanent debt, as has been the company’s game plan on other recent, large-portfolio and individual acquisitions.”
The Texas-based assets in the portfolio included seven properties encompassing 1,586 units, with a total closing sale price of $99.4 million. Several investment advisors from across the state were involved with the Texas-area sales. They included Mike Miller, Chris Ross, Will Caruth and Cody Courtney of the firm’s San Antonio office; Tom Burns and Jay Gunn of Berkadia’s Dallas office; and Greg Austin, Chip Nash and Wade Schmitz of the Houston office.
The total price of the closed Ohio properties was in excess of $106 million. Partner Mark Rohr and vice president Eric Taylor of the Michigan office were involved in the marketing of the Ohio portion of the portfolio, an eight-property, 2,146-unit collection of multifamily assets in the Columbus metro area.
Additional closings included properties in the Midwest and South. The Louisiana property was marketed by Gregg Cordaro of Berkadia’s Baton Rouge office. Laurel Wallerstedt of the Kansas City office listed the property in Arkansas. Aaron Hargrove of the Oklahoma City office assisted with the property in Oklahoma. The total sale price from these transactions was $32.1 million and included 576 total units.
— Danielle Everson