McDowell Properties acquired the Southeast Portfolio comprised of six properties totaling 2,271 units. The properties are located in Charlotte, Atlanta, Dallas and Orlando. This was a complex transaction involving the purchase of six REITs that owned the real estate as opposed to purchasing the real estate directly. McDowell’s experience in purchasing entities and complicated debt transactions were pivotal factors McDowell securing the portfolio. The properties are extremely well located and the business plan calls for exterior improvements to enhance the properties and improve their position in each sub-market. In addition, a large capital budget has been established to increase rents through interior upgrades. The acquisition was made in joint venture with a NASDAQ traded public company.
McDowell Properties acquired Regatta at Lake Lynn in Raleigh, North Carolina. The property is in an attractive infill location close to Downtown Raleigh, Research Triangle Park, North Carolina State University and other employment drivers. McDowell closed the transaction within 30 days of signing the purchase contract. The business plan calls for selective improvements including landscaping upgrades, exterior painting and amenity enhancements. McDowell are also planning a targeted interior renovation program to maximize the value of the asset.
McDowell Properties acquired $215MM of defaulted debt secured by 4,733 apartment units at a 40% discount to face value. Despite the complexity, McDowell closed the transaction in an expedited time frame, 30 days, to meet the seller’s requirements. McDowell executed a deed in lieu of foreclosure within 30 days after acquiring the debt and now owns the real estate. Under new ownership, McDowell is implementing a focused renovation plan combined with intensive asset management to maximize the value of the assets. The portfolio was 84% occupied at closing, providing great upside potential when the properties stabilize. The properties are located in Austin, Dallas, Phoenix, Tulsa and Tampa.
McDowell Properties has made investments in a total of seven subordinate debt tranches, or “B-Pieces”, of multifamily loan securitizations. The debt was acquired at substantial discounts to face value and has the potential for very attractive yields considering the risk profile. The collateral consists of $8.2BN of multifamily loans made under stringent underwriting standards and at an attractive point in the real estate cycle. McDowell is one of the few groups that have participated in this program. It was selected because of its strong track record and reputation as an experienced operator.