Interest in affordable paths to homeownership and the growing popularity of lower density living are raising the profile of the manufactured housing option among American households and investors. At the same time, the government sponsored enterprises (GSEs) Fannie Mae and Freddie Mac are making concerted efforts to better serve this historically underfinanced market at both the individual homeowner and community levels. The combination of robust cash flow growth (particularly in Sunbelt and Western markets), cap rate compression, and liquidity provided by the GSEs makes a compelling case for manufactured housing community (MHC) acquisitions and refinances. As increased competition has left market participants looking for an edge amidst compressing cap rates, the importance of working with an experienced MHC lender with access to short- and long-term loan programs has become more apparent. The following provides an in-depth analysis of the recent performance of rental MHCs, sales volume and pricing trends, and loan and underwriting trends in the MHC space. The Performance of the Site Rental Market The COVID-19 pandemic affected American housing preferences in profound ways. Increasingly, households are seeking lower density options with larger floor plans, home offices, and dedicated space for entertaining or distanced learning. This phenomenon …
Multifamily
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RALEIGH, N.C. — Capital Square plans to develop a 20-story multifamily tower at 320 W. South St. in Raleigh’s Warehouse District. The 297-unit development is slated for completion by June 2024. Capital Square plans to break ground on the approximately $121 million project in April 2022. The development will offer studios, one-, two- and three-bedroom units. The apartment community will also feature 8,384 square feet of ground-floor commercial space, as well as an adjacent, standalone parking tower with 437 parking spaces. Community amenities will include a swimming pool, rooftop lounge, coworking space and a fitness center. The property is situated at the intersection of the Boylan Heights neighborhood, Dorothea Dix Park and downtown Raleigh. The apartment community will be close to the RedHat Amphitheater and Raleigh Convention Center and will be situated adjacent to U.S. Highway 70. CSRA Opportunity Zone Fund VI, Capital Square’s project-specific fund seeking to raise $48.5 million from accredited investors and a minimum investment of $100,000, will provide part of the financing for the project.
HUNTSVILLE, ALA. — Dwight Capital has provided a $29 million loan for Monte Sano Terrace, a 324-unit apartment complex located in Huntsville. The property includes 23 garden and townhome-style buildings, as well as a clubhouse and leasing office. Located on over 25 acres at 125 Ridgegate Place, Monte Sano Terrace is situated about 2.3 miles from downtown Huntsville. Built in 1988, the community was 96 percent occupied at the time of the transaction. Community amenities feature a fitness center, swimming pool, business center, sports court, dog park, picnic area and a playground. The refinancing is a HUD 223(f) loan. The loan benefitted from a green mortgage insurance premium (Green MIP) reduction set at 25 basis points because the property qualifies as green/energy efficient housing. Brandon Baksh and Daniel Malka of Dwight Capital originated the loan on behalf of the borrower and property owner, Tibs Realty.
DALLAS — A partnership between Dallas-based RREAF Holdings, North Carolina-based DLP Capital and 3650 REIT has acquired a portfolio of 13 multifamily properties totaling more than 2,000 units across various Sun Belt states. This deal marks the first tranche of a larger, three-phase acquisition that is slated to close by early November. The entire portfolio totals 21 multifamily communities and 4,000-plus units and is valued at $534 million. Taylor Bird, Andrew Brown and Jaime Slocumb of Cushman & Wakefield represented the sellers in the transaction. Berkadia arranged Freddie Mac acquisition financing on behalf of the new ownership, which will implement a variety of capital improvements to the properties.
CHICAGO — Lendlease has broken ground on The Reed, a 41-story residential tower at 234 W. Polk St. in Chicago’s Printers Row neighborhood. Designed by Perkins + Will, The Reed will feature 216 condominium units on floors 23 through 41 and 224 apartment units on floors nine through 22. Completion is slated for 2023. The project represents the second residential tower and the first for-sale offering within Lendlease’s Southbank development, which encompasses seven acres along the south branch of the Chicago River. Condos will range in size from 630 to 1,670 square feet and will be priced from the low $400,000s up to $1.4 million. Residents will have access to two amenity suites and a private garage parking. The eighth floor will feature a 12,000-square-foot outdoor deck with a pool, cabanas, grilling stations, dining areas and fire pits. Indoor amenities on this floor will include a lounge room, pool table, virtual sports simulation room, salon and massage room, screening room and fitness centers. The Southbank master plan includes Southbank Park, a two-acre green space designed by Hoerr Schaudt. Both Southbank Park and the Riverwalk, which will provide a pedestrian connection between Harrison and Polk streets upon completion of The Reed, …
CHICAGO — Becovic, a Chicago-based multifamily owner and operator, has acquired 6758 N. Sheridan in Chicago’s Rogers Park neighborhood for $9.8 million. Originally built in 1974, the 73-unit multifamily property features 29 studios and 44 one-bedroom floor plans. Rick Ofman and Danny Logarakis of Kiser Group represented both Becovic as well as the seller, The Vranas Family Trust.
ARLINGTON AND PLANO, TEXAS — JLL has negotiated the sale of The Orchards at Arlington Heights and The Orchards at Market Plaza, two active adult communities In the Dallas area totaling 360 units. The second community is located in Plano. The age-restricted properties offer amenities such as clubhouses, pools, movie theaters, game rooms, salons, fitness centers, gift-wrapping stations and activity rooms. Cody Tremper and Mike Garbers of JLL represented the seller, Kompass Kapital Management LLC, in the transaction. The buyer was Capitol Seniors Housing.
FRISCO, TEXAS — Hillwood has opened The Cadence at Frisco Station, a 322-unit apartment community located within the 242-acre Frisco Station mixed-use development on the northern outskirts of Dallas. The property features studio, one- and two-bedroom floor plans, as well as townhomes. Each residence is furnished with stainless steel appliances, granite countertops and custom cabinetry. Amenities include a pool with cabanas, fitness center, pet washing facility, resident lounge with a coffee bar and coworking space with private offices and a conference room. Rents start at approximately $1,500 per month for a studio apartment.
HUTTO, TEXAS — Locally based owner-operator Aspen Heights Partners has acquired 36 acres in the northern Austin suburb of Hutto for the development of Bell Yard, a 219-unit single-family rental (SFR) community. The property will offer two-, three-, and four-bedroom homes with attached garages, modern interiors and designer finishes, as well as an assortment of resort-style amenities. Construction is scheduled to begin in May of next year and to be complete in late 2023.
GRAND PRAIRIE, TEXAS — A partnership between Maryland-based investment firm FCP and VaultCap Partners has purchased Prairie Ridge Apartments, a 100-unit multifamily property located in the central metroplex city of Grand Prairie. Prairie Ridge offers one- and two-bedroom floor plans and amenities such as a playground and onsite laundry facilities. The partnership will merge the property with the adjacent Corey Place Apartments, which it acquired this summer, and operate the combined community as Marabella on Pioneer. Nick Fluellen, Bard Hoover and Wesley Racht of Marcus & Millichap represented the seller, an undisclosed limited liability company, in the off-market transaction.