A Long Island real estate investment firm is expanding its growing multifamily portfolio in the Southeast with two new acquisitions.
Syosset-based Toro Real Estate Partners paid $10.1 million for a pending ground-up development in Clarksville, Tenn. that will bring a 65,000-square-foot student-housing complex to a 3-acre site across from Austin Peay State University.
The soon-to-be-built four-story building on the property, formerly owned by the Mount Olive Missionary Baptist Church, will be able to accommodate up to 156 students at a projected monthly rent of $600 per resident.
Toro also acquired a vacant 338-unit apartment building on 15 acres in Mobile, Ala. from Varden Capital Partners for $10.14 million in a deal that closed last week. Toro plans to invest another $6.5 million to renovate the 260,000-square-foot rental complex.
Toro principal Don DiRenzo said one of the perks of the Clarksville project was its $1 million in tax incentive financing.
“You’re starting out $1 million ahead of the game,” DiRenzo said.
Another attraction was that demand for student housing in the Clarksville area exceeds supply.
“There was no true student housing in the area,” DiRenzo said. “The school has been putting students up in hotels.”
As for the Alabama acquisition, Toro principal John Cohen said the value-add situation suited the firm’s strategy of acquiring under-performing assets in emerging markets.
“We like Mobile for the opportunity to buy a property that was in significant disrepair,” Cohen said. “And for what we’re paying we’ll be well below the cost of new construction in the area.”
In the last 12 months, Toro has acquired five multifamily properties for about $75 million, all in the Southeast. The firm also has another $50 million to $75 million in its acquisition pipeline, according to DiRenzo.