RESIDENTIAL
Newport Beach’s KBS Realty Advisors isn’t having trouble raising cash, or spending it.
A new real estate investment fund backed by KBS and another real estate investor from Los Angeles has made a deal for its first apartment buy.
KBS Legacy Partners Apartment REIT Inc. said this month in a Securities and Exchange Commission filing that it has entered into a pact to buy Dakota Hill, a 504-unit complex in Irving, Texas. At $36.1 million, the deal works out to about a $78,000 per apartment.
The complex totals about 452,000 square feet and is 94% full.
The property had been owned by a real estate firm in Minot, N.D., according to local reports.
KBS plans to fund the purchase through the assumption of an existing $23.2 million mortgage loan with an interest rate that can’t exceed 7.25%, and proceeds from a 6% bridge loan that’s not expected to exceed $13.8 million, according to the filing for the non-traded fund.
The fund is being run in conjunction with the housing arm of Foster City-based real estate company Legacy Partners Inc. Its backers hope to raise up to $2.8 billion from investors to buy apartments.
It’s the latest acquisition that KBS—one of the most active real estate buyers in the country right now—has been involved in.
In addition to running a series of funds that attract individual investors, KBS Realty Advisors also manages pension fund money. All told, the company’s been involved in more than a billion dollars worth of deals in 2010, including a $655 million office buy in Chicago last month.
Its source of funding doesn’t appear to be slowing down, according to industry reports.
KBS Realty Advisors recently got a $73 million allocation from the Illinois Teachers’ Retirement System. It’s one of four real estate fund mangers to get some $322 million of the system’s money this month, according to reports.
KBS Realty now manages about $372 million of the Illinois pension fund’s money, according to Pension & Investments magazine.
Steadfast Kicks Off
Another apartment-focused real estate investment fund backed by Irvine’s Steadfast Cos. also has made its first acquisition.
The company’s Steadfast Income REIT Inc., which kicked off operations earlier this summer, is buying Lincoln Tower, a 190-unit apartment complex in Springfield, Ill.
The 17-story building is across the street from the Illinois Capitol. The building’s 95% leased and also includes 8,500 square feet of commercial space.
Chief Executive Rodney Emory said the fund negotiated “favorable terms” in the $9.5 million purchase. The seller was Springfield, Ill.-based Lincoln Tower Inc.
The fund became effective in July. Steadfast is looking to raise as much as $1.65 billion in all and said it would start looking to buy properties once it raises more than $2 million.
Apartments should make up as much as 75% of the fund’s portfolio, with industrial properties also being targeted.
COMMERCIAL
Newport Beach’s RiverRock Real Estate Group, a commercial real estate management and leasing firm that’s been focused on California properties to date, is expanding into Arizona.
The company said this month it’s been tapped by an industrial property owner to take over property management for a 1.6 million-square-foot portfolio in the Phoenix area. The portfolio includes 14 large manufacturing and distribution warehouse buildings, according to the company.
The name of the property owner wasn’t disclosed. Trade reports say the portfolio’s owned by Denver-based DCT Industrial Trust Inc. RiverRock took over another 2.5 million-square-foot Southern California portfolio of DCT properties earlier this year.
Laguna Hills-based Muller Co. was said to have been awarded the portfolio management contract for DCT’s Phoenix portfolio in March.
The company’s added Michelle Weber, previously a property manager with Transwestern in Phoenix, to oversee the industrial portfolio there.
RiverRock’s management portfolio now totals more than 14 million square feet.
Olson Builds
Irvine’s R.D. Olson Construction, which focuses on hotel development and renovation work, said a recently completed 129-room project was finished at “record” low construction costs, at $10.5 million.
Olson built the Homewood Suites by Hilton Oxnard, a roughly 100,000-square-foot project just off the Ventura (101) Freeway. It opened a few months ago. T.M. Mian of Dallas is the hotel’s owner.
