Throughout American Landmark Apartments’ ambitious multifamily acquisitions this year, there’s been at least one constant — attorney Michael Denberg.
“I did all their acquisitions this year. I don’t think there was one I didn’t do. They’ve had a very good year, very good year,” said the partner at Saul Ewing Arnstein & Lehr in Fort Lauderdale.
American Landmark, a Tampa-based multifamily owner and operator, has bought 22 apartment properties throughout the Southeastern U.S. for a combined $1.4 billion and plans to pick up about $200 million more by year’s end.
“We have five, six, maybe seven” more deals on tap, Denberg said.
Most recently, he represented the company on its purchase of the 292-unit Siena apartments in Plantation and the 200-unit Verse at Royal Palm Beach for $105 million from San Diego-based Fairfield Residential in a deal that closed Nov. 1. The combined purchase price breaks down to about $214,431 per unit.
American Landmark bought the two properties with Palm Beach-based equity partner Electra America. It’s an affiliate of Electra Real Estate, which focuses on the acquisition, management and improvement of multifamily properties, and is owned by Israel-based, publicly traded Elco Ltd.
American Landmark has been targeting value-add properties to renovate and reposition them in areas with population and job growth.
In a Nov. 5 Associated Press article, American Landmark CEO Joe Lubeck said his focus was on secondary markets.
“Our business model is simple: identify value-add properties in secondary markets and boost NOI by providing ‘best in class’ customer service, superior amenities and top-notch management,” Lubeck said.
The Plantation and Royal Palm beach apartment communities are near big employers.
Siena is a five-mile drive from Plantation General Hospital and the collegiate education center in Davie and about a mile from Magic Leap’s headquarters. Verse at Royal Palm Beach is a short drive from the The Crossroads shopping mall.
“Their business model is that they go into areas that have strong multifamily fundamentals. They look for above-average job growth and population growth, and they emphasize great customer service as they self-manage. It’s not third-party management as they manage their own properties,” Denberg said. “They do upgrades and rehabs, and they make the communities better, safer, so they can grab more tenancy and move the rents a little bit. That’s them as a buyer.”
American Landmark also did some strategic dispositions this year, generating some good returns, Denberg added.
Other acquisitions this year included three multifamily communities in Charlotte, Raleigh and Durham, North Carolina. The company bought them for $167 million from LivCor, a Chicago-based, multifamily-focused Blackstone Group company.
American Landmark has focused its acquisitions in the Southeast and Texas.
“They are not looking at areas where people are fleeing, whether it’s tax-wise or cold weather,” Denberg said. “The Sunbelt has always been attractive for that type of program.”
He said he doesn’t know if American Landmark will increase its rents at Siena and Verse at Royal Palm Beach, which previously was called Hidden Harbor apartments.
Generally, Denberg said value-add investors want to recapture their investment.
“Anybody who buys is looking to improve and recapture those costs over a period of time. Obviously you are not looking to move people out of your units. If you have good tenants, you are not looking to chase them away,” he said. “I am sure they will gradually move pricing commensurate with the market.”
American Landmark plans to invest $3.54 million at Siena and $2.7 million at Verse, MultifamilyBiz reported Nov. 5.
Siena offers one-bedroom apartments starting at $1,425 and two-bedroom apartments starting at $1,499, according to its website. Verse has two-bedroom apartments available for $1,385, according to its website.
Michael Wolfe at Meltzer Purtill & Stelle in Schaumburg, Illinois, represented the seller.