Toronto-based Brookfield Asset Management, a global alternative asset manager with approximately $150 billion in assets under its belt, is betting the run-up in apartment values still has legs, paying $414 million to buy a portfolio of 19 multifamily properties totaling 4,892 units located in North and South Carolina and Virginia.
BAM said the portfolio, which has an average occupancy of 92%, is expected to yield superior occupancy rates and rental increases. Brookfield intends to increase rents after making an additional $30 million investment to selectively upgrade and reposition certain of the properties. Fairfield Residential, an affiliate of Brookfield, will assume management of the portfolio.
The portfolio was sold by Babcock & Brown Residential, formerly part of the Australia-based Babcock & Brown global investment and advisory firm that went belly-up in 2009. But not before Babcock & Brown spent $316 million to take Charlotte-based BNP Residential Properties private. Babock added BNP’s 8,180 apartment units in the Carolinas and Virginia to its existing portfolio, giving it 28,000 multifamily units nationally.
Following parent company Babcock and Brown's bankruptcy, several former managers of BNP split from Babcock & Brown and formed Charlotte-based Gingko Residential in August 2010. Under the agreement, Gingko continued to manage Babcock’s 28,500 units, with Babcock & Brown Residential retaining ownership of the multifamily properties. Babcock & Brown was advised by Robert W. Baird & Co. in the sale to Brookfield.