GLOBAL - The Camden Multifamily Value Add fund, 80% owned by the Teacher Retirement System of Texas, has closed on its first two apartment deals in more than two years.
The investment fund paid $24m (€17.5m) to buy the 306-unit Camden Yorktown complex in Houston and $16m to purchase the 110-home Camden Ivy Hall complex in Atlanta.
Camden Property Trust is the manager of the Value Add fund.
Rick Campo, chief executive, said: "The apartment market is improving. We saw a clear change in the market at the end of the first quarter and the beginning of the second quarter. Since then, our properties in certain markets have seen rent increases.
"One example of this is in Phoenix, where rents at our properties have gone up 6-8%. This might surprise some people, as Phoenix was a market that was pegged with an over supply of apartment units.
"Another positive factor it that there are fewer people in the market for single-family homes, and more are looking at renting apartments."
Camden Yorktown is a property that had some management issues, and the trust is hoping to make it a better performing property with a new management strategy. The cap rate on this deal was 5.75% based on the current rents in the property.
The Ivy Hall property is a busted condominium development, only about two-thirds completed when the property was acquired. The cap rate on this asset was 7%.
Camden has $225m worth of additional purchases under contract in markets like Tampa, Orlando, Denver and Texas. The publicly traded REIT hopes to close on at least some of these deals in the near future.
It also has a number of development deals in the works for the investment fund as well. One of these is located in Atlanta.
Texas Teachers made commitments totaling $300m into the Value Added Fund in 2007 and 2008, giving it an 80% ownership stake in the fund.
The other $75m of equity or 20% ownership into the fund was supplied by Camden.