Magma Equities has acquired Independence Park Apartments, a 312-unit garden-style community in Durham, NC for $50 million.  Independence Park is Magma’s fifth apartment investment in the Tar Heel State in the past 14 months.

Magma tied up the asset and was able to complete its due diligence and secure attractive agency financing prior to the onset of the Covid-19 pandemic.  Even as the economic climate shifted dramatically, Magma maintained the agreed-upon purchase price with the seller, according to Magma CFO Michael Wagar.  

“As active buyers in the region, we were able to source the opportunity off-market and avoid the competitive bidding process.  As a result, we were very comfortable with the price as negotiated,” said Wagar.   “This was a very good deal for us in January and a very good deal for us now.  Despite the current challenges, we expect it to perform well over the long-term.”

Built in 2009, Independence Park features a mix of one-, two- and three-bedroom units housed in 13, three-story residential buildings on a 23-acre site at 215 William Penn Plaza.  Community amenities include swimming pool, fitness center, business center, clubhouse, 24-seat multimedia theater, tennis court, sand volleyball court, basketball court, playground and dog park.    

Independence Park benefits from numerous demand drivers including its proximity to Downtown Durham and the Research Triangle Park, two of the largest employment centers in the region.  It is also located two blocks from Duke Regional Hospital and directly adjacent to Voyager Academy, a K-12 charter school that ranks among the top schools in the region. 

“The Research Triangle is highly desirable employment center that attracts recent graduates from highly regarded surrounding universities to its top employers,” added Magma Principal Robert Murray.    “In the midst of COVID-19, we stress tested the Independence acquisition differently than when we first approached it and were able to work with all parties involved to get the transaction done.”  

Magma will suspend renovation plans and immediately begin outreach to offer any assistance it can to keep tenants housed and “heads on beds,” according to Wagar.  Independence Park was 96 percent occupied at closing.

Dennis Harris at The Kirkland Company in the firm’s North Carolina office represented the seller.  Jesse Nichols, Princial in the Los Angeles office of Polsinelli was Magma’s legal representative.  

Abe Spira and Justin Hechler at Greystone secured the debt with Freddie Mac through its floating rate loan program. 

Multifamily investment firm Magma Equities in joint partnership with Henley Investments has closed on its second apartment acquisition in the Raleigh, NC metro in the past three months, with the $26 million off-market purchase of Chapel View Apartments, a 224-unit community in Chapel Hill. 

For the past three years, the 18-acre garden-style community located at 2701 Homestead Road, two miles north of downtown Chapel Hill, had been operating as a student housing facility.    Despite its proximity to the University of North Carolina, the property had suffered from higher than market vacancy.  This created a value add opportunity to reposition the property as a traditional market-rate apartment community that will help meet the demand for quality affordable rental housing in the area; the result of the region’s impressive population and employment growth, according to Magma managing principal Ryan Hall.

“Much of the new inventory being added to the market is luxury product and cost prohibitive to most renters living in Chapel Hill,” said Hall.  “At our cost basis, we will be able to improve the property’s physical appearance and social atmosphere to create a brand new apartment community that will compete with existing Class B+ properties in the submarket, but at a price point currently unavailable in the market,” said Hall.   

Chapel View Apartments features a mix of one- and two-bedroom floorplans and boasts a variety of common area amenities including swimming pool, fitness center, basketball and tennis courts and a cyber café. 

Renovation plan includes updating building exteriors, common areas and all interiors of the one- and two-bedroom apartment homes, with such improvements as new stone countertops, stainless steel appliances, plumbing and lighting fixtures, and flooring. 

Since entering the Raleigh/Durham multifamily market in February 2019, Magma Equities and its capital partners have invested nearly $90 million in the region, building a portfolio of approximately 700 units. 

“As we develop a track record here in the Triangle, we continue to see more off-market opportunities that allow us to circumvent the competitive bidding environment for listed properties in the Raleigh market,” added Hall.   “This contributes greatly to our ability to buy below replacement cost and create value for both our investors and our tenants.” 

Garrett Solomon, Managing Director and CIO of Henley Investments’ North American group added, “We see tremendous opportunity in the Raleigh multifamily market and we’re excited to work with Magma to expand our successful value-add repositioning strategy. As we continue to provide accessible housing options for the local workforce.” 

Ownership has engaged Pinnacle Management, the third largest property management firm in the U.S. to manage the property.  

Deaton Investment Real Estate represented the buyer in the transaction. 

Multifamily investment firm Magma Equities has made its third investment in the Raleigh-Durham MSA this year, with the off-market acquisition of a 199-unit garden style apartment community in downtown Raleigh, NC.

University Apartments is located at 700 Ryan Court at the southern edge of North Carolina State University.  The two- three- and four-bedroom floorplans are housed in 40 townhouse style residential buildings on a low density 22.5-acre parcel.  Also located on the site are two single-family homes.   Community amenities include a swimming pool, leasing office, basketball court and picnic area. 

The property, which has been owned by the family of the original developer since it was constructed in 1960, has been expanded in phases by various members of the family over the next four decades.  As a result, the property lacks a consistent architectural look and feel.  The final phase was completed in 2003.    Additionally, the interiors of many of the units are in their original condition. 

The property is located on one of the last developable parcels within the City of Raleigh’s Avent Ferry Corridor Redevelopment Plan.  According to the plan, the site has been reclassified for higher density to meet the demand for quality housing for both students and families, according to Magma Equities Managing Partner Ryan Hall.  

“The property plays an integral role in the City’s overall plan to enhance livability in the area by improving and increasing the variety of housing options for students and working families,” said Magma Equities Managing Partner Ryan Hall.  “We are working closely with the City to help them meet that goal.” 

Magma Equities will immediately undertake a multimillion-dollar capital improvement program that will include a complete renovation of all unit interiors as well as a comprehensive upgrade of all building exteriors and common areas to create a modern, cohesive park-like community.   The firm is also considering a variety of options to redevelop the existing site as medium density student housing.  

Since entering the Raleigh/Durham multifamily market in February 2019, Magma Equities and its capital partners have invested more than $60 million in the region, building a portfolio of more than 550 units. 

Magma Equities was represented by Deaton Investment Real Estate, Inc. 

Henley Investments, a leading private equity real estate firm based in the UK and the USA in partnership with multifamily investment firm Magma Equities have acquired a 199-unit garden apartment community in Raleigh, NC, kicking off their residential portfolio acquisitions in the Southeast US housing market. 

Arbor Crest features a mix of one- two- and three-bedroom floorplans  up to 1,000 square feet spread over 27 residential buildings on a 24-acre site.    Located just six miles north of downtown Raleigh, the community is close to daily need shopping, restaurants, entertainment, sports venues.  It is within an easy drive of the campuses of NC State University, UNC Chapel Hill, Duke University, as well as Triangle Town Center and Raleigh-Durham International Airport. In addition to its garden apartments, Arbor Crest offers townhomes with up to three bedrooms and 1,320 square feet of living space.  Arbor Crest is an amenity-rich community with swimming pool, bbq grill, picnic areas and a children’s playground. 

“This is a sought-after North Hills address, and we are happy to bring it into the fold of Henley’s modernized multi-family apartment properties,” said Henley CEO Ian Rickwood.

Garrett Solomon, Henley’s Chief Investment Officer for their North American market, agrees. “Raleigh is a sophisticated city, and people here want a property that is up-and-coming and comfortable, but still affordable. Arbor Crest provides exactly that, and Henley is proud to be part of the local Raleigh landscape.” 

Henley and Magma’s planned refurbishments at Arbor Crest include new design for all common areas, updated landscaping, pool upgrades and individual apartment restyling. New amenities will include a clubhouse and fitness center, outdoor kitchen, dog park and a hammock area.

This is Henley’s first strategic partnership with Magma Equities, which, as operating partner will oversee the renovation.   A Los Angeles-based, vertically integrated real estate investment firm, Magma Equities specializes in the acquisition and repositioning of value-add Class B apartment communities throughout the United States.   Arbor Crest is the second multifamily investment for Magma Equities in the Raleigh/Durham MSA this year.  

“Magma sourced this acquisition off-market, directly from the original owner who has managed the asset for the past 40 years,” added  Magma Equities Managing Principal Ryan Hall.  “The property is in excellent condition, but with some modern upgrades and professional management Arbor Crest could be top of its class and draft off the impressive development that is occurring in North Hills.”

Designed to meet an increasing demand for entry-level, for-sale housing in the Seattle metro, Magma Equities has completed its multimillion-dollar condominium conversion of a 52-residence community in Kirkland, WA.

The Slater offers a mix of studio, one- and two-bedroom floor plans with prices starting from $395,000. Each home, ranging in size from approximately 541 to 1,120 square feet, features stainless steel appliances, glass top stoves, full-sized washers and dryers, walk-in closets, floor-to-ceiling windows and luxury plank flooring.  

The residence mix includes five homes permanently designated as affordable housing for residents earning less than 80 percent of the area’s median income. The median income in King County is $103,000, according to the Department of Housing and Urban Development. Prices for the affordable homes begin at $185,000. 

The Federal National Mortgage Association (Fannie Mae) reports that there are more than 40,000 households in Seattle paying more than 50 percent of income on rent. 

“Housing costs continue to consume a large percentage of wage earners’ income, especially in  in Seattle, which is one of the most expensive housing markets in the United States,” said Ryan Hall, managing principal of El Segundo, CA-based Magma Equities. “With average asking rental rates approximately $2,100 per month, condo ownership at this price point can be a realistic and a more practical option for many renters. Interest rates  are still at historic lows, and mortgage payments can be several hundred dollars a month less then rents for a comparable apartment. More importantly, housing costs will remain constant.”

There are currently 6,187 multifamily rental units under construction with an additional 9,433 in the pipeline in the Seattle metro, all of which are luxury, Class A product,  according to a report by Polaris Pacific who represents the sales and marketing for the property on behalf of Magma Equities.  

 “While new construction is trying to keep up with demand, the fact is the new inventory is priced well out of the reach of most renters in the region, which is doing nothing to solve the housing affordability problem,” added Josh Nasvik, VP Regional Manager at Polaris Pacific in the firm’s Seattle office. “As a result, we are seeing an increase in condominium sales, especially in Kirkland where sales have substantially outpaced all the other Seattle submarkets in the past three months.”

Magma Equities and Polaris Pacific have entered into a strategic partnership with San Francisco-based home and lifestyle retailer Batch, for the design and curation of two model homes at The Slater, with the full assortment of furnishings available for purchase.  

“We are thrilled to be a part of The Slater’s unique offering in the Seattle market,” said Lindsay Meyer, CEO and Co-Founder of Batch. “We believe this highly customized and shoppable approach to home staging not only helps to differentiate The Slater, but also meets the needs of a new generation of homebuyers who want easy access to beautiful furnishings and décor at an affordable price.” 

Magma Equities acquired the property at 11415 Slater Avenue NE in October 2018. Originally built in 2010, the five-story building is amenitized with a fitness center, secured lobby, underground parking, club room, and courtyard with barbecue and lounge seating. The building opens for sale March 23, 2019, by appointment. To learn more or register for sales information, visit: TheSlaterKirkland.com.

Holliday Fenoglio Fowler, L.P. (HFF) announces the capitalization for the acquisition and renovation of Stone Ridge Apartments and Bristol Ridge Apartments, two apartment properties totaling 363 units in Nashville, Tennessee.

The HFF team worked on behalf of Los Angeles-based Archway Equities LLC to arrange the capitalization for the $29 million acquisition of Stone Ridge and Bristol Ridge Apartments.  The seller acquired the assets in 2012 and 2013 as distressed bank-owned assets and spent the last six years improving and stabilizing them.  The new partnership, with the help of asset managers Magma Equities and 37urban, intends to re-brand both assets and complete a renovation plan that will improve amenities and aesthetics on both properties.

Archway’s purchase of Stone Ridge and Bristol Ridge Apartments closed just days ahead of Amazon’s announcement of 5,000 new jobs in the Nashville market as well as the announcement of a new 600-employee office for Ernst and Young and AllianceBernstein’s move of its headquarters from downtown Manhattan to downtown Nashville.

Both properties are within six miles of downtown Nashville, accessible via U.S. Highway 41 and Interstates 24 and 40.  The communities are adjacent to the Murfreesboro Pike retail corridor, which provides a wide variety of shopping and dining options, and proximate to the proposed MLS Stadium at the Nashville Fairgrounds.  The area is also well-connected to public transportation and the Nashville International Airport.

The HFF equity placement team representing the sponsor included senior director Zack Holderman and analyst Daniel Pinkus.

“We are excited to enter the market with these two assets,” stated Sean Moghavem, President of Archway Equities.  “Between the $300 million, 30,000-seat MLS stadium development and the $1.2 billion airport expansion nearby, we knew it would be a strong opportunity for us.  We’re eager to find more assets here in the coming months and believe this market will continue to bear successful opportunities for us.”

“This portfolio is an excellent example of a forward-thinking sponsorship group with the capabilities and expertise to execute a complex business plan,” Holderman added.  “Nashville is an exciting market with strong fundamentals, particularly for this profile of investment, which is located in a rapidly gentrifying submarket.”