TORONTO — Brookfield Asset Management Inc. (NYSE: BAM), a global alternative asset management firm headquartered in Toronto, has purchased a portfolio of 19 apartment communities in North Carolina, South Carolina and Virginia for $414 million.
The portfolio totals 4,892 units and is 92 percent occupied. The acquisition will bring Brookfield’s portfolio to approximately 20,000 units throughout the country.
“The acquisition of this attractive portfolio adds to Brookfield’s significant multi-family platform and positions us for continued growth in this property sector,” says David Arthur, managing partner at Brookfield Asset Management.
The 19 multifamily properties include:
- Bridges at Chapel Hill in Carrboro, N.C.
- Chason Ridge in Fayetteville, N.C.
- Fairington in Charlotte, N.C.
- Hamptons at South Park in Charlotte
- Latitudes in Virginia Beach, Va.
- Mallard Creek I in Charlotte
- Mallard Creek II in Charlotte
- Marina Shores Waterfront in Cornelius, N.C.
- Oak Hollow in Cary, N.C.
- Oakbrook in Charlotte
- Paces Commons in Charlotte
- Paces Watch Apartments in Mt. Pleasant, S.C.
- Quail Hollow in Charlotte
- Bridges at South Point in Durham, N.C.
- The Timbers in Richmond, Va.
- Waterford Place in Greensboro, N.C.
- Waverly Place Apartments in N. Charleston, S.C.
- Bridges at Wind River in Morrisville, N.C.
- Woods Edge in Durham
Fairfield Residential, an affiliate of Brookfield, has an existing geographic footprint in the Carolinas and Virginia and will manage the 19 assets in the portfolio. Fairfield currently manages approximately 50,000 multifamily units around the country. Additionally, Fairfield has purchased $20 billion worth of real estate assets and has sold more than $13 billion in multifamily investments.
The portfolio is currently financed with individual non-recourse first mortgage loans. Brookfield has assumed these loans as part of the acquisition. Additionally, Brookfield intends to invest approximately $30 million to selectively upgrade and reposition the apartment communities in order to increase rents and bolster the return on investment.
The 19 communities are concentrated in the Charlotte and Raleigh-Durham submarkets in North Carolina. Marcus & Millichap is forecasting asking rents in the Charlotte multifamily market to rise to $840 per month this year, a 3.8 percent increase from the 2012 average.
The brokerage firm predicts that long-term, private investors will continue to target Charlotte multifamily communities in 2013 due to an uptick in rental rates, a projected 5.3 percent vacancy rate and a 2.2 percent increase in job creation in the greater Charlotte area.
Robert W. Baird & Co. advised the seller, Babcock & Brown Residential, in the portfolio disposition.
The chart below highlights the assets under Brookfield's management:
Chart courtesy of Brookfield Asset Management
Brookfield has approximately $150 billion in assets under management. The firm is co-listed on the New York Stock Exchange and the Toronto Stock Exchange (TSX: BAM.A), as well as on the NYSE Euronext (Euronext: BAMA).
Brookfield’s major shareholders include Partners Limited, Royal Bank of Canada, BMO Capital Markets Corp., TD Asset Management Inc. and the Bank of Nova Scotia, according to Morningstar. Brookfield’s assets include commercial real estate, renewable power, civic infrastructure, private equity, construction companies and property services.
Brookfield Asset Management’s stock price closed Tuesday at $38.63 per share on the New York Stock Exchange, up from $31.28 per share a year ago.
— John Nelson