Properties: 11 apartment buildings
Buyer: Post Road Management
Property type: Garden style
Location: Wichita, Kansas
Purchase price: Withheld
There are many reasons why Post Road Management has targeted Wichita, Kansas, in recent years. The Nazareth, Pennsylvania-based multifamily investment firm liked the area’s organic growth, apartment supply constraints and economic recovery from the COVID-19 pandemic enough that it owned four properties there totaling 572 units coming into 2022.
“More than three years ago, we started purchasing in Wichita, a supply-constrained city where [housing is] concerned,” Borko Milosev, principal and partner at Post Road Management, told Multifamily Dive. “We had strategized to handle our expansion into Wichita in stages.”
In March 2022, Post Road took that expansion to the next stage and made an even bigger bet on Wichita, agreeing to buy 11 properties totaling 1,002 units. It began closing on the assets in July and wrapped up the process in March.
“The time was the perfect opportunity to expand our multifamily footprint deeper into the Midwest,” Milosev said. “We had an eye on the area for some time given its job growth and rent costs. We moved intentionally to grow our footprint substantially.”
With the 11-property acquisition, Post Road can leverage economies of scale in Wichita, and plans to increase its employees in the market from 13 to 42. The company has taken over management at the apartment communities and hired a regional manager, community managers, maintenance technicians and project managers in conjunction with this portfolio acquisition.
The portfolio ranges from Class C-plus workforce housing to Class A new development and includes a variety of size and layout options. Post Road plans to invest an average of approximately $12,000 per unit in upgrades across the portfolio.
“Only 21% of the total units have been fully renovated, allowing us to unlock value-add potential,” Greg Rarick, vice president of acquisitions and dispositions at Post Road, said in a press release. “Residential tenants in Wichita pay only 17% of their income on rent, indicating an opportunity to entice those who may be interested in paying a premium for upgraded space in the market.”
Post Road bought the portfolio with assumable non-recourse Fannie Mae and HUD financing in place. “The challenges were no more than those encountered in the usual process for our business,” Milosev said.
Since its founding in 2003, Post Road has acquired $1 billion in assets and effectively owns and operates over 16,000 units across 13 states. Milosev plans to continue growing.
“We look forward to similarly deepening our capabilities and scaling in other high-growth markets throughout the country,” he said.
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