Greystar Real Estate Partners' purchase of all four former Legacy apartment complexes set an unprecedented trend for pricing newer multifamily properties in the Oklahoma City metro area.
The per-unit prices, which reached $161,000 in the case of Legacy at Arts Quarter, 301 N Walker downtown, reflect pent-up investor demand for apartments and national investor confidence in the metro area, especially the heart of Oklahoma City.
Andy Burnett and David Burnett, multifamily investment specialists with Newmark Grubb Levy Strange Beffort in Oklahoma City, handled the portfolio sale. The seller was Inland American Real Estate Trust Inc.
Greystar, based in Charleston, S.C., and founded and led by Oklahoma native Bob Faith, paid $48.75 million (about $161,000 per unit) for 303-unit Legacy at Arts Quarter, built in 2007; and $31.7 million (about $106,000 per unit) for 298-unit Legacy Corner, 777 N Air Depot Blvd. in Midwest City.
Earlier this month, Greystar paid $38.53 million (about $97,000 per unit) for 396-unit Legacy Crossing, 3131 SW 89; and $32.6 million (about $99,000 per unit) for 328-unit Legacy Woods, 1919 E Second St. in Edmond.
The $151.6 million in purchases here were part of a larger portfolio acquired from Inland for a total of $460 million.
The purchase of the downtown Oklahoma City complex — and its price of $161,000 per unit — was the biggest head-turner.
“The price per unit for Arts signifies the strength of the downtown multifamily market,” David Burnett said. “Arts has experienced 6 percent average rent growth each year since 2008 with the occupancy never dipping below 95 percent. All four properties are performing very well as is the multifamily market as a whole.”
Andy Burnett said, “Oklahoma City is in a great place right now. All of the major economic indicators are trending in the right direction. Companies like Greystar really scrub a market before entering it. This is a solid vote of confidence in Oklahoma City. I expect prices continuing to trend higher as more good news rolls in for OKC.”
Greystar has renamed all the properties: Legacy at Arts Quarter to Avana Arts District, Legacy Crossing to Avana 3131, Legacy Corner to Avana Midwest, and Legacy Woods to Avana on 2nd. Greystar said it also will renovate the clubhouses, landscaping and interior finishes.
“Along with our recent acquisitions earlier this month of Avana 3131 and Avana on 2nd, Greystar is excited about further investing in Oklahoma City with the purchase of both Avana Arts District and Avana Midwest,” said Clay Wolford, senior director of investments for Greystar. “We feel that Oklahoma City has a compelling growth story with its heavy presence of companies in the growing domestic energy space, the significant amount of civic investment being made through the city's public private partnership, and its growing and diverse employer base.”
The purchases came as Greystar Real Estate Partners observes its 20th year in business. Faith founded Greystar in August 1993 in Houston with the acquisition and consolidation of several Texas-based multifamily management and service providers.
The company grew “using its management platform as a foundation for its burgeoning multifamily investment and development business,” Greystar said in announcing its 20-year anniversary earlier this month. Greystar moved its headquarters to South Carolina in 1999 and now has 20 corporate offices and a presence in more than 100 U.S. markets.
For the past three years, the National Multi-Housing Council has recognized Greystar as the largest manager of apartment properties in the country, with more than 200,000 individual apartment homes under management.
In addition, over the past two years, Greystar has seen record growth in its development work and was recognized as the largest builder of apartments in 2012, with 5,360 units started. The company has apartments underway in Texas, Colorado, Florida, California, Arizona, Washington, Minnesota, Georgia, South Carolina, Virginia and Maryland.
“We are very proud of what we have accomplished in our first 20 years,” Faith said in the anniversary announcement. “We are also very grateful to our clients and partners for their ongoing support and to our team members for their dedication and hard work in achieving this important milestone.”