Property: Tuscany Bay
Buyer: Revitate Cherry Tree
Property type: Garden-style
Units: 96 units
Location: Lawrenceburg, Indiana
Purchase price: Withheld
Revitate Cherry Tree may be based on the West Coast, but its executives are focused on the country’s heartland.
The firm grew from a partnership between two Newport Beach, California-based players — diversified investment platform Revitate and real estate investment firm Cherry Tree Capital Partners — to focus on workforce housing in half a dozen Midwestern metros.
As it seeks properties, Revitate Cherry Tree looks for older assets that are well maintained. “You can think of these as naturally occurring affordable housing rather than government-sponsored affordable housing,” said Chris Marsh, general partner with Revitate Cherry Tree.
Revitate Cherry Tree targets rental properties that primarily serve working families, who are typically employed in industries such as healthcare, manufacturing, education, logistics, local government, retail and entry-level white-collar jobs.
“We like our strategy of active preservation of workforce housing for these families, rather than an ultimate strategy that our competitors are playing … where they're taking the existing asset and they're effectively repositioning it so as to capture higher rents,” Chris Marsh, a general partner with Revitate Cherry Tree, told Multifamily Dive. “That is specifically not our strategy.”
As it seeks out properties in Midwestern cities with a history of employment diversity and job and population growth, it found a ripe opportunity with the 96-unit Tuscany Bay property in Lawrenceburg, Indiana. The property includes large two- and three-bedroom floor plans, an upgraded clubhouse, a pool, a playground, a TV room and a fitness center.
“It's a well-maintained, well-operated asset, and we intend to go in there and continue that solid operating platform,” Marsh said.
Proximity to jobs
Tuscany Bay, approximately 26 miles from Cincinnati, sits near a newly developed 800,000-square-foot Amazon Air Hub cargo facility at the Cincinnati/Northern Kentucky International Airport. It's also within commuting distance of major Cincinnati employers such as Kroger, the University of Cincinnati, Procter & Gamble and General Electric.
“Cincinnati is a little gem of a town,” Marsh said. “Six Fortune 500 companies are headquartered there, and there has been heavy diversification into tech talent over the last decade. And Indiana is a terrific state in which to operate.”
Typically, Revitate Cherry Tree seeks properties built in the 1980s, 1990s and early 2000s. Marsh said Tuscany Bay, constructed in 1999, is on the newer end of the spectrum for the company.
“It was a perfect fit for the amount of funding we had available left in Fund I,” he said.
In the last year, Revitate Cherry Tree bought six properties totaling 841 apartments in Fund I. Though it is no longer making investments from that vehicle, it is still seeking opportunities.
“We have $110 million now in assets under management under Fund I, and we're actively preparing to launch Fund II to really focus on exactly the same strategy of expanding our portfolio presence in markets that we like,” Marsh said.
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