TG Advisory closes North Carolina Multifamily Deal
Entering the Carolinas for the first time, TG Advisory closed on 564 garden style apartments in Fayetteville, North Carolina in an off-market deal worth $58,750,000. Leveraging its relationship with the seller, TG Advisory brought in Van Metre Companies as its acquisition partner and operating manager. Together, they plan to build a portfolio of 5,000 units in sunbelt states through quality deals.
Naftali Tilson at TG Advisory believes that “the key to the success of this acquisition was a strong relationship with the seller and the ability to attract the right partners to the deal. We focus on using our connections to bring together the correct manager, optimal debt and equity partners with aligned interests to get transactions done.”
Fayetteville was an attractive market for TG Advisory given the strong growth in demand that has arisen from increasing investment in the nearby Fort Bragg army base and very limited new inventory. “Fayetteville has flown under the radar for many buyers, but as cap rates have compressed in core markets, buyers have recognized gems like Fayetteville which have an attractive supply-demand dynamic;” according to Adam Goodvach from TG Advisory.
Comprising two properties, constructed in 2006 and 2012, this acquisition features a mix or 1, 2 and 3 bedroom units with vacancy of only 2%. TG Advisory engaged directly with the developer who preferred an off-market transaction. The properties were well maintained although significant upside can be unlocked by more active management.
TG Advisory are replacing the in-place HUD loan with a new HUD loan to capitalize on current low interest rates. Returns were enhanced by sourcing an attractive balance sheet bridge loan of nearly $50,000,000 from Walker Dunlop who are also providing the HUD loan for the property. The HUD process was long and complex but in a low-interest rate environment, the benefit of a 35 year fixed term made it worthwhile to persevere. TG Advisory brought in Kay Finance who have experience with both HUD and Bridge loans to ensure that the debt strategy was optimized to the specifics of the deal.
TG Advisory will continue to pursue properties that offer attractive, risk-adjusted returns to the acquiring group. Naftali continued, “We bring together the right partners to provide certainty of close for sellers who are not seeking a public, broker-driven sales process. In the current market, the ability to execute without the fuss at a fair price is a rare proposition.”
Location: Fayetteville, North Carolina
Units: 564 Garden-style Units
Purchase Price: $58,750,000