Dallas firm buys thousands of apartments in the Southeast for about $500 million

A Dallas firm and two partners bought thousands of apartments for about half a billion dollars in a bet on the Southeast U.S.

Dallas-based RREAF Holdings LLC, in partnership with 3650 REIT of Miami and St. Augustine, Fla.-based DLP Capital, has acquired a portfolio of more than 2,744 apartments in 10 properties across the Southeast for about $500 million, the company said Thursday.

The deal “marks a milestone for our firm for affordable, quality housing options to renters in the Southeast as RREAF continues our business plan of providing superior living options at an affordable price,” said Kip Sowden, chief executive officer of RREAF Holdings.

This is the three firms’ third portfolio deal of the past year, following their purchase of 4,000 units across the Sun Belt in November and two apartments in Corpus Christi in July.

RREAF said the deal is believed to be one of the largest multifamily transactions of 2022 and will infuse significant capital into “quality, workforce rental units.” RREAF’s in-house property management company will oversee the apartments.

The apartment complexes were built between 1998 and 2012 and 93% were occupied as of October. Most had no new apartments within a five-mile radius. All the apartments were bought from one seller, which RREAF did not disclose.

The buyers plan to upgrade amenities with electric car charging stations, dog runs, pickleball courts and business centers with fiber cable. They also plan to update pools, tennis courts, outdoor kitchens, entertainment packages, clubhouses and lighting.

Jonathan Roth, co-founder and managing partner of 3650 REIT, said in a statement that the deal “reflects our continuing belief in the strength of the multifamily market in the Sun Belt states as migration patterns continue to drive demand in these markets in the face of the ongoing housing shortage and economic headwinds nationwide.”

The portfolio includes:

• Glen at Polo Park, Bentonville, Ark.
• River Pointe in Maumelle, Ark.
• Village Mill Creek in Statesboro, Ga.
• Echo Ridge and Pheasant Run, Indianapolis
• Waterford Place, Greenville, N.C.
• Reserve at Long Point, Hattiesburg, Miss.
• Traditions at Westmoore, Oklahoma City
• 5iftyOne at Tradan Heights, Stillwater, Okla.
• Broad River Trace, Columbia, S.C.

“Through our collaborative investment and our mission to keep these apartments affordable for the local workforce, we will impact hundreds of families who want to live where they work,” said DLP Capital founder and CEO Don Wenner in a statement. “Additionally, we can deliver targeted returns to our loyal investors who believe in our mission.”

RREAF acquires, develops and manages apartments, hotels and resorts as well as master-planned developments, including a planned project in Midlothian it revealed in May. The firm has more than 500 employees across the Sun Belt and manages more than $5 billion in assets across 15 states.

In addition to its headquarters in Miami, 3650 REIT is a nationwide commercial real estate lender with offices in Dallas, New York, Los Angeles, Atlanta and Nashville. DLP Capital is a real estate investment and financial services firm that manages more than $4 billion in assets.