3650 REIT has made preferred equity investments in two portfolio transactions involving assets worth more than $1.2 billion.
Most recently, 3650 provided $93.5 million of preferred equity to recapitalize a 12-property portfolio (Southern Portfolio) with more than 3,500 residential apartments located throughout the Southeast U.S. 3650’s preferred equity investment is subordinate to existing Fannie Mae senior mortgage loans.
The Southern Portfolio is owned by a joint venture between Onyx Partners, led by Jeremy Rieder, and David Werner Real Estate.
”3650’s capital contribution to the Southern Portfolio will recapitalize existing preferred equity and provide additional capital for renovation of the subject properties,” said the company ia satatement.
The company also recently provided $89 million of preferred equity to RREAF Holdings LLC for the acquisition of three separate multifamily portfolios totaling 21 properties with more than 4,000 residential apartments across the Southeast U.S. (Transcoastal Portfolio).
These two investments mark the first two significant deals from 3650’s Preferred Equity Investment program, which is led by 3650 REIT Managing Director Michael Fleischer.
“In light of the ever-shifting landscape of commercial real estate and its asset classes, it is critical that our investment strategy constantly evolve to reflect current market conditions,” said 3650 co-founder and managing partner Jonathan Roth.
“The multifamily housing market in the Southeast and Sun Belt regions remain supply constrained, and these transactions reflect 3650’s commitment to investing in attainable housing and helping to improve the existing housing stock in these markets. We are proud to be working with David Werner and Onyx Partners on the Southern Portfolio, and RREAF Holdings on the Transcoastal Portfolio as we continue to expand our footprint in the residential housing market,” he added.
David Werner, founder of David Werner Real Estate, stated, “We are pleased to announce the closing of the recapitalization of the Southern Portfolio with 3650 REIT. The 3650 team was instrumental to getting this extremely complicated multi-party transaction closed, and we look forward to this being our first of many transactions together.”