The glut of newly built apartments delivered over the past couple of years poses a challenge for many apartment operators, who are forced to offer concessions to retain residents in highly competitive markets.
However, for real estate investment firms, they offer an opportunity to acquire new properties at a discount to replacement costs.
Stockdale Capital Partners, which holds investments in hospitality, retail and medical offices, is one such opportunistic company. Over the last 30 days, the Los Angeles-based firm has acquired two properties as it expands its multifamily division with high-demand assets in strong markets. With those purchases, it now owns three apartment complexes.
Stockdale Managing Director Chase Jensen told Multifamily Dive he sees rising loan maturities, declining supply and future rent growth combining to make this a good time to buy. The firm is seeking properties in markets with population, employment and wage growth.
“There are a lot of assets out there that are good assets, but have a bad capital structure,” Jensen said. “That creates a lot of opportunities.”
Two recent deals
In October, Stockdale acquired Amelia at Farmer’s Market, a 297-unit class A community in downtown Dallas, from San Antonio-based Kairoi Residential.
The property, built in 2019, features an open-air sky lounge with views of downtown, a rooftop infinity-edge pool, an all-inclusive courtyard pool and lounge, a wine lounge, a community library, a 24-hour state-of-the-art health studio and designer kitchens with luxury finishes. Greystar will manage the building.
On Nov. 3, Stockdale announced the $110 million acquisition of The Quincy at Kierland from San Antonio-based Embrey, a recently completed 266-unit luxury mid-rise multifamily community in North Scottsdale, Arizona, according to a news release shared with Multifamily Dive.
The Quincy at Kierland, situated in the 730-acre master-planned community of Kierland, features a mix of one- and two-bedroom apartment homes, each with 10-foot ceilings, stainless steel appliances including full-size washers and dryers, engineered hardwood floors, stone countertops and walk-in closets. Its amenities include a resort-style pool with a pool house and a fireside lounge, a fitness center, a yoga room, a pet park, a business center and a 24-hour package room.
The property is situated adjacent to a planned mixed-use development that is expected to generate additional demand. “The micro location we bought there at North Scottsdale really stood out, similar to the Farmers Market area of Dallas,” Stockdale Managing Director of Asset Management Samuel Palmer told Multifamiy Dive.
More deals on the way
Stockdale bought both Amelia at Farmer’s Market and The Quincy at Kierland in all-cash deals. “They fall within the same purview of a newer asset where there's a situational need for the seller to exit in a short period of time,” Palmer said.
After making the cash purchase, Stockdale will then take out a loan. “We take a lot of our deals down all cash, but then we finance them shortly thereafter,” Palmer said. “It's just the speed execution for the sellers in both of the last two deals that we did was very important.”
The firm would like to have agreements to buy another couple of properties before the end of the first quarter in 2026. Then, it would like to lock down a couple more in Q2.
Palmer expects to see more of its target — newer apartment communities — hit the market next year, which will open up acquisition opportunities.
“For our strategy, we just see a lot of liquidity needs on the newer assets that we're targeting,” Palmer said.
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