09/19/2012

Capri Marketing 8 Apartment Complexes

Fund shop Capri Capital is shopping a well-occupied apartment portfolio valued at about $275 million that has some upside potential.

The package contains eight garden-style complexes, with 2,224 total apartments, that are spread out over five states. The estimated value works out to $124,000/unit. Investors can bid on individual properties or the entire portfolio. Chicago-based Capri has given the listing to CBRE.

The complexes, built between 2000 and 2003, are all about 95% occupied. Two each are in the Dallas, Denver and Orlando areas. The other two are in suburban Las Vegas and Palm Desert, Calif., just outside Palm Springs.

Despite the propertiesí recent vintage and stabilized status, there is room to boost revenues. Capri upgraded a handful of units at some of the properties and was able to raise rents, even though the local markets were still recovering from the downturn. The marketing pitch is that a buyer could continue upgrades and employ even bigger rent hikes because of growing strength in those markets.

Also, two properties can be expanded. One of the Dallas complexes includes land suitable for construction of an additional 200 units. And land adjacent to one of the Denver properties could house 188-300 units, depending on the design.

Capri acquired the properties in 2007 at an allocated price of $238.1 million, or $107,000/unit. They were among eleven properties, with 2,606 units, that Capri bought from Whiteco Residential of Merrillville, Ind., for $325 million.

Regional operators are likely to bid on portions of the portfolio, while institutional investors might bid on the whole package. Institutions have been warming up to portfolio offerings over the past 18 months. Only 13 apartment portfolios traded in 2010, according to Real Estate Alertís Deal Database, but the figure jumped to 42 in 2011. In the first half of this year, another 22 portfolios changed hands.

The properties being offered by Capri are:

Monterey (332 units), at 4601 South Balsam Way in Littleton, Colo.

Stone Mountain (320 units, plus land), at 11625 Community Center Drive in Northglenn, Colo.

Middlebrook Farms (320 units), at 4000 Middlebrook Road in Orlando.

Stone Castle (220 units), at 2015 New Stone Castle Terrace in Winter Park, Fla.

Dominion Town Center (276 units), at 1300 Keller Parkway in Keller, Texas.

Lakes of Stone Glen (216 units, plus land), at 300 Bourland Road in Keller.

Canterra (306 units), at 74-401 Hovley Lane East in Palm Desert.

Adobe Ranch (234 units), at 1350 Kelso Dunes Road in Henderson, Nev.

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