Tailwind Investment Group has entered the San Francisco and Las Vegas metro areas with the acquisition of a three-property portfolio for $59.5 million, according to a press release shared with Multifamily Dive.
The Newport Beach, California-based apartment owner and operator purchased three assets totaling 365 units, at approximately 95% occupancy, in an off-market transaction on Dec. 3 from a motivated long-term family owner.
Tailwind assumed the existing HUD loan, which offers a strong current cash yield and attractive future income growth potential, according to Vice President of Investments Trey Wheeler.
The three properties include:
- Berryhill, a 96-unit garden-style community in Grass Valley, California, built in 1980, includes one-, two- and three-bedroom layouts with a leasing office, clubhouse and pool. Grass Valley is a supply constrained tertiary market in Northern California that has not seen a comparable market-rate property in more than a decade, according to the press release.
- Morrell Park, a 160-unit garden-style asset in Henderson, Nevada, built in 1981, includes a large leasing center and clubhouse, a resort-style pool, and proximity to the growing Water Street District. Its renovated unit interiors include stainless steel appliances, hard-surface countertops, tile backsplashes and new cabinetry and lighting.
- Peachwood, a 109-unit garden-style apartment property in Fairfield, California, is Tailwind’s first acquisition in the greater area. Built in 1981, the property features two pools, two laundry facilities and landscaped grounds. The firm plans to add a new leasing office and fitness center to the asset.
“After several years of maintaining our disciplined approach to sourcing new acquisition opportunities, we are excited to plant the Tailwind flag in each of these respective markets,” Tailwind Managing Principal Parker Pinkalla said in the press release. “We look forward to executing on our business plans to enhance each of these assets.”
Apartment Management Consultants will oversee the day-to-day property management at the three properties, while Tailwind will oversee asset and construction management on behalf of the institutional joint venture with an undisclosed fund manager.
Since its inception in early 2021, Tailwind has purchased 2,200 units, totaling $520 million in capitalization, across the Southwest, Mountain West and California regions. But wide bid-ask spreads, pricing dislocation and capital markets volatility made it challenging for the firm to make acquisitions recently.
“Tailwind has maintained a disciplined approach to both acquisition pursuits and strategic asset management over the past few years since our previous acquisition,” Wheeler told Multifamily Dive in emailed comments.
The company currently owns 10 properties across four states, including Arizona, California, Nevada and Utah and plans to scale the portfolio to approximately 10,000 units over the next several years.
“Tailwind intends to continue pursuing assets with a discount to replacement cost, an attractive going-in basis, and compelling supply/demand fundamentals,” Wheeler said.
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