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Saturday, Dec 2, 2023

Olen Adds Southeast Rentals; $165M in Buys

Nearly a decade after Olen Properties Corp. began a concerted effort to grow its apartment portfolio in the southeastern U.S., sensing an impending economic boom in the area, there’s little sign of a slowdown for the second-largest real estate owner headquartered in Orange County.

The Newport Beach-based real estate owner and investor recently paid $91 million for The Reserve at Sugarloaf, a 333-unit multifamily community in Duluth, Ga., a rapidly growing area about 30 miles northeast of Atlanta.

The complex, built in 2002, counts a mix of units that average a little more than 1,225 square feet, according to marketing materials for the property.

The Reserve provides access to more than 1 million jobs and is located in one of the Atlanta area’s strongest suburban markets, according to brokers with Cushman & Wakefield that worked on the deal.

“Olen Properties has a specific acquisition profile, and The Reserve at Sugarloaf fits their needs perfectly. They were attracted to this asset for its timeless aesthetic, large floor plans, and high-quality schools,” said Alex Brown, C&W executive managing director.

North Carolina Buy

Last week, Olen struck another deal, to buy the Villages at Westford, a 296-unit complex in Apex, N.C., an upper-middle class suburb located south of Research Triangle in Raleigh-Durham.

The company is expected to pay about $74 million, or $250,000 a unit, for the property, which is being sold by a unit of Blackstone.

The complex was built in 2019, and counts an average unit size of 1,046 square feet, according to marketing materials. The all-cash deal is expected to close in a few weeks, sources tell the Business Journal.

17K+ Unit Portfolio

The deals mark two of the larger acquisitions the past few years for Olen, which has rapidly built its holdings in booming markets in and around Nashville, Tenn., Charlotte, N.C., and Atlanta the past 10 years. It also has long counted a large base of rental properties in Florida.

The additions bring its rental portfolio over 17,500 units. Olen has added over 6,000 units during the past 15 years, with an emphasis on low-rise, garden-style apartments, particularly in the southeast. It now owns rental units in eight states.

A good portion of the company’s rental portfolio is believed to be owned debt free by Olen, with the rest carrying a modest amount of financing via Freddie Mac loans.

The Business Journal estimates that Olen’s apartment portfolio alone is approaching $7 billion in value.

“Our garden apartments continue to grow modestly, and are showing that my early-on decision that they are by far the best investment in commercial real estate is holding truer than ever,” Olen President Igor Olenicoff told the Business Journal.

Privately held Olen also counts over 8 million square feet office and flex space, much of it in Orange County.

The value of those assets, along with having what sources say to be substantial cash holdings, stocks and other investments, are reasons the Business Journal’s current estimate of Olenicoff’s wealth is $8.5 billion, a $300 million boost from a year ago (see list, page 14).

Low-Rise Offices

Building its base of apartment holdings in some of the country’s better-performing markets has proven to be one example of good timing for Olen in recent years.

There’s been other fortuitous moves made by the company, founded in 1974, in recent years.

It largely avoided investing in high-rise offices, and in 2018, sold its most valuable tower, Chicago’s One South Dearborn skyscraper, for a reported $360 million.

That move proved prescient amid the pandemic, when many tenants sought out low-rise space, Olen’s preferred office type. Tower valuations have in turn fallen in most of the country’s largest markets.

Olenicoff says Olen’ occupancy in its local offices still tops 90%, and expects the market to remain strong.

“Orange County is back and solid, however you have to pick your product type and not get greedy,” he said.

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Sonia Chung
Sonia Chung
Sonia Chung joined the Orange County Business Journal in 2021 as their Marketing Creative Director. In her role she creates all visual content as it relates to the marketing needs for the sales and events teams. Her responsibilities include the creation of marketing materials for six annual corporate events, weekly print advertisements, sales flyers in correspondence to the editorial calendar, social media graphics, PowerPoint presentation decks, e-blasts, and maintains the online presence for Orange County Business Journal’s corporate events.

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