Pure Multi-Family REIT announced today that it has entered into an agreement to acquire a multi-family apartment community, known as the Brackenridge at Midtown, located in San Antonio, Texas, for a purchase price of US$51,000,000.
Brackenridge was constructed in 2014 and consists of 282 brand new luxury residential units averaging 852 square feet. Located just east of Broadway on Brackenridge Avenue, Brackenridge combines urban living amongst a park-like setting with heritage oaks, a manicured Village Green, an expansive pet park, spectacular views, and Brackenridge Park one block to the west.
Within the same submarket lies The Pearl, a commercial area brimming with nightlife, restaurants, and retail. Several major employers are within a two-miles radius of Brackenridge including: Fort Sam Houston, University of the Incarnate Word, Trinity University, and Downtown San Antonio. Fort Sam Houston is the largest public sector employer in the San Antonio metro area with 31,664 employees and is located only a few blocks to the east of Brankenridge. Other companies with headquarters in close proximity include Whataburger, Rackspace, HEB, and Zachry Construction.
Brackenridge offers custom home interior features such as stainless steel appliances, granite countertops, wood-style flooring and walk-in closets.
Pure Multi-family intends to fund the purchase of Brackenridge with proceeds from its bought deal financing which closed on May 8, 2015, proceeds from the previously announced sale of Oakchase Apartment Homes, which is expected to close on September 2, 2015, and new first mortgage financing in the amount of US$30,600,000, which bears a fixed interest rate of 3.72 per cent per annum for a term of 12 years. The purchase price represents a stabilized going-in capitalization rate of 5.60 per cent.
Steve Evans, CEO, commented, “We are very excited to add the Brackenridge at Midtown to our existing portfolio. The acquisition increases our exposure in San Antonio, a strong and growing market. The newly constructed Brackenridge asset will bring the average year of construction of our portfolio to 2002, which reflects our strategy of continuing to high-grade our portfolio. By selling one of our oldest assets, Oakchase Apartment Homes (built in 1984) at a 5.80 per cent capitalization rate, and using the proceeds on a tax-deferred basis by way of the 1031 like-kind exchange program to acquire a brand-new asset at a 5.60 per cent capitalization rate, we continue to create unitholder value organically through strategic upgrading of our portfolio.”
The acquisition of Brackenridge is subject to the satisfaction of customary conditions precedent and is expected to close on September 30, 2015. After the Brackenridge acquisition has completed, Pure Multi’s portfolio will consist of 15 multi-family properties situated on 254 acres of land, with 4,701 apartment units in 267 buildings.