Argyle, Sembler JV To Acquire $1.5B Multifamily Portfolio

Argyle Real Estate Partnership and Sembler Investments have formed a joint venture that plans to acquire a $1.5-billion multifamily portfolio in Sun Belt markets.

The partnership will target core-plus and value-add acquisitions in the Southeast and Texas over the next two to three years, focusing on apartments built after 2000 in markets experiencing major population growth that boast a high quality of life as well as an influx of corporate relocations.

Tampa-based Argyle is a new real estate investment firm formed by industry veteran Ryan Reyes. In a statement, Reyes expressed confidence that the market fundamentals in the multifamily sector will continue to be strong despite rising rates and economic slowdown.

“The fundamentals for multifamily remain strong despite the recent macroeconomic and capital market trends,” Reyes said. “We believe this dichotomy between the underlying asset class and capital market conditions will present compelling investment opportunities in the months ahead.”

Sembler Investments, also based in Tampa, has holdings in healthcare, financial services and hospitality as well as commercial real estate.

“In addition to the opportunities we’re currently seeing in this market, we think a focus on this space benefits our other efforts at the same time,” said Mark Sembler, in a statement.

The red-hot multifamily sector outperformed all other asset classes in Q2 2022 with $78B in US sales volume, nearly half of the $167B recorded in all sectors, according to CBRE.

The $78B in sales volume represented a 32.4% increase over the multifamily sales volume in Q1 2021.

The multifamily sector continued to generate historic rent growth in Q2 2022, with average rents increasing 17.5% YOY, up from 15.7% in Q1. Seven of the top 10 markets for multifamily rent growth in Q2 were in the Sun Belt, according to a report from Arbor.

The Greensboro/Winston-Salem market topped the rent growth leaderboard, with average Q2 effective monthly rents of $1,082 marking a 28.3% YOY increase, followed by Palm Beach ($1,964, 28.2%) and Orlando ($1,561, 27.8%).

Also in the top 10 for rent growth, with YOY increases ranging from 23% to 27%, were Tampa, Miami, Charleston SC, Jacksonville and Greenville SC.

In CBRE’s Q2 capital markets report, issued earlier this month, half of the 10 markets with the largest investment volume growth in multifamily, based on a YOY comparison, were in the regions targeted by the new Argyle, Sembler partnership.

Houston topped CBRE’s list, with more than $17B in multifamily sales volume since Q2 2021—a YOY increase of more than 220%—followed by Orlando, which notched a 205% increase with about $10B in volume. South Florida came in fourth with a 117% increase to $34B; Tampa was sixth, with 107% growth to $14B; and Raleigh/Durham was eighth, with a 105% increase to $7.8B.