Holliday Fenoglio Fowler, L.P. (HFF) announces it has closed the sale of and arranged financing totaling $51.135 million for a three-property, 335-unit apartment portfolio in downtown Kansas City, Missouri.
HFF marketed the property on behalf of the seller, Steadfast Income REIT, Inc., and procured the buyer, ARTISAN Capital Group. Additionally, HFF worked on the new owner’s behalf to secure a $38.85 million, seven-year, fixed-rate Fannie Mae loan through HFF’s risk-transfer joint venture with M&T Realty Capital Corporation, as well as $12.285 million in joint venture equity from Westminster Capital LLC. In addition to funding the acquisition, proceeds from the financing will be used to implement the new owner’s value-add strategy by improving operations and management.
The properties in the portfolio are Library Lofts, a 118-unit building located at 1004 Baltimore Avenue; Stuart Hall, a 115-unit building located at 2121 Central Street; and EBT Lofts, a 102-unit building located at 1601 Walnut Street. The historic buildings, which were originally built between 1899 and 1910, are situated within two of Kansas City’s most in-demand downtown locations, the Library District (Library Lofts) and the Crossroads Arts District (Stuart Hall and EBT Lofts), providing residents with convenient access to major area transportation arteries and some of the city’s trendiest of retail, dining and entertainment amenities. The adaptive re-use properties comprise a mix of loft-style units ranging from studio to three-bedroom floor plans totaling 333,180 rentable square feet. In addition, the buildings include 21,130 square feet of ground-floor commercial space. The portfolio is 94 percent occupied overall.
The HFF investment advisory team representing the seller was led by senior director David Gaines, managing director Marty O’Connell and senior managing director Danny Kaufman.
HFF’s debt placement team representing the new owner was led by managing director Matthew Schoenfeldt and director Gregory Napper.
About Steadfast Income REIT
Steadfast Income REIT, Inc. is a real estate investment trust that was formed to acquire and operate a diverse portfolio of real estate investments focused primarily on the multifamily sector, including stable, income-producing and value-added properties.
Steadfast Income REIT, Inc. is sponsored by Steadfast REIT Investments, LLC, an affiliate of Steadfast Companies, an Orange County, California-based group of affiliated real estate investment and operating companies that acquire, develop and manage real estate in the U.S. and Mexico.
About ARTISAN Capital Group
ARTISAN Capital Group performs extensive due diligence on potential target markets by studying characteristics such as employment drivers, population and household formation trends, permitting activity, and other factors that impact supply & demand fundamentals. ARTISAN then works diligently to source investment opportunities that provide attractive relative value and produce strong cash yields for its capital partners.
ARTISAN believes an arbitrage exists in select “secondary” and “tertiary” markets throughout the Midwest, creating a buying opportunity for well-located and high-quality apartment assets. Institutional capital investors often target metropolitan centers with populations of one million people or greater, and make binary decisions to eliminate other markets based on population statistics alone. By targeting markets with populations of 200,000 to two million people, ARTISAN delivers strong cash yields while lowering the risk-profile of the investment.
About M&T Realty Capital Corporation
M&T Realty Capital Corporation is a wholly-owned commercial mortgage-banking subsidiary of Manufacturers and Traders Bank, better known as M&T Bank Corporation. Founded in 1856 in Buffalo, New York, M&T Bank Corporation is a regional financial services company with more than $115 billion in assets. M&T is a community-focused bank that serves customers in New York, Maryland, New Jersey, Pennsylvania, Delaware, Connecticut, Virginia, West Virginia and Washington, DC through more than 750 branches, 1800 ATMs, and a variety of online and mobile services.
About Westminster Capital
Westminster Capital manages real estate investment strategies on behalf of private wealth capital, including sponsorship of closed-end investment funds and separate account portfolios totaling $860 million of investor capital. Westminster Capital makes commercial property investments throughout the United States across industrial/distribution, apartments, medical office and senior living properties offering value-add to opportunistic risk-reward returns. Such work includes rebuilding income streams of existing properties or manufacturing them through new construction. The firm employs careful investment underwriting and pursues well-funded tenants motivated by powerful, long-term secular trends in their needs for such properties. Founded in 1988, the firm is headquartered in Lake Forest, Illinois.
HFF and its affiliates operate out of 26 offices and are a leading provider of commercial real estate and capital markets services to the global commercial real estate industry. HFF, together with its affiliates, offers clients a fully integrated capital markets platform, including debt placement, investment advisory, equity placement, funds marketing, M&A and corporate advisory, loan sales and loan servicing. HFF, HFF Real Estate Limited, HFF Securities L.P. and HFF Securities Limited are owned by HFF, Inc.