SEATTLE--(BUSINESS WIRE)--Security Properties, one of the largest investors and operators of residential real estate in the U.S., announced today the close of its Security Properties Multifamily Fund, launched in June 2011. The fund acquired, both directly and through joint ventures, 2,471 apartment units located in the Seattle, Portland, the San Francisco Bay Area and Phoenix markets. The total acquisition cost of the fund’s 17 apartment properties was approximately $390 million.
“This fund allowed private investors an opportunity to allocate capital – directly and alongside major institutional partners – to a sizeable portfolio of cash flow-generating apartment properties,” said Ed McGovern, managing director of capital markets at Security Properties. “By leveraging our industry and capital relationships, the fund offered investors participation in a broader pool of larger properties which can be managed and marketed more efficiently.”
McGovern said that Security Properties used the commitments in the fund to assemble a portfolio of existing apartment properties that generates attractive cash yields, benefits from favorable tax treatment and offers a hedge against future inflation. “Rather than employ a cookie-cutter investment program, we look at the real estate assets on an individual basis, and decide which strategies and tactics will generate the best return on investment for a specific asset,” he added.
The Security Properties Multifamily Fund included a diversified portfolio of moderately leveraged apartment properties offering attractive risk-adjusted returns to investors. The acquired properties are enhanced with a balanced mix of investment strategies – including opportunistic, core-plus, and value-add strategies that renovate and reposition the investments. Security Properties recently sold its first asset in the Security Properties Multifamily Fund, called Chelsea Heights, located in Tacoma, Wash. The sale of the condo-to-apartment conversion project, purchased out of foreclosure, generated a highly attractive return to investors.
The close of Security Properties’ fund comes at a time when many industry experts are pointing to apartments as one of the best-performing real estate product types. The Urban Land Institute, in cooperation with PricewaterhouseCoopers, said in a recently published report that “apartments should continue to outperform all other property types on a risk-adjusted basis, with excellent cash flow components.” The 2013 Emerging Trends in Real Estate study — part of an annual series of trends and forecast publications that reflect the views of leading real estate executives in three global regions — also expects apartment rents and project values to continue to rise in most markets, likely well into next year.
Formed more than 40 years ago, Security Properties has acquired or developed more than 66,000 housing units totaling approximately $3.35 billion in cost across 460 assets. In just the past 13 years, Security Properties has invested about $793 million of equity capital in market-rate and tax credit apartments, as well as market-rate developments.
During its four decades in business, Security Properties has delivered compelling returns throughout multiple real estate cycles – all under the same ownership – due, at least in part, to its long-standing relationships with both institutional partners and private investors. Security Properties maintains a focused strategy of acquiring, developing and operating multifamily properties in select target markets, an approach McGovern says will continue well beyond the current real estate cycle.
“We believe multifamily housing will continue to benefit from strong demographic and societal forces, particularly in major markets and their inner ring submarkets, with positive job creation driven by innovation, a diversity of goods and services, and connections to the global economy,” added McGovern. “We’ll continue to pursue these opportunities to provide our investors with lower volatility cash flow-generating alternatives to stocks and bonds.”
About Security Properties, Inc.
For more than 40 years, Security Properties has provided both quality housing to its residents, and excellent financial performance for its investors and partners. Since its inception, Security Properties’ experience has included acquiring or developing over 66,000 residential units exceeding $3.35 billion in cost across more than 460 assets. Today, Security Properties continues to maintain a focused multifamily strategy, acquiring and developing properties in select target markets. The company’s multifamily strategy is supported by a vertically integrated corporate structure with expert acquisition, development, construction, investment management, tax credit housing and property management teams in place. For more information, visit www.securityproperties.com.
