Lone Star Funds Buys National Multifamily Portfolio for $1.8B

by John Nelson

NEW YORK AND GREENSBORO, N.C. — Lone Star Funds has acquired a multifamily portfolio that includes 20,439 units in 64 communities across the United States for $1.8 billion. The properties were originally acquired by DRA Advisors LLC and Bell Partners in 2008 as part of a deal that included 25,684 units in 86 communities. This acquisition represented the largest multifamily transactions of 2008, according to the joint venture.

DRA Advisors and Bell Partners sold 22 communities to other purchasers, with Lone Star ultimately buying the remaining 64 apartment communities in the portfolio.

“This portfolio has generated strong cash yields and has benefitted from our active asset management approach throughout the hold period,” says David Luski, DRA’s president. “The end result is a great deal for our clients, with returns well ahead of expectations.”

Bell Partners will continue to manage the 64 communities. CBRE represented the joint venture in the transaction.

“We are very pleased with the outcome of this investment,” says Jon Bell, president of Bell Partners. “We appreciate the trust that Lone Star has placed in our operating capabilities in keeping Bell on as the manager of these communities. In this respect, this transaction is both a win for our investors and our associates.”

Lone Star is a global private equity firm that invests in real estate, equity, credit and other financial assets. Since the establishment of its first fund in 1995, Lone Star has organized 13 private equity funds with aggregate capital commitments totaling more than $52 billion.

DRA Advisors is a New York-based registered investment advisor. It specializes in real estate investment management services for institutional and private investors, including pension funds, university endowments, foundations and insurance companies.

Bell Partners is a privately held apartment investment and management company focused on high-quality multifamily communities across the East Coast and Southwest. It has nearly 65,000 units under management.

— Nellie Day

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