DALLAS, TX – S2 Capital, a national vertically integrated multifamily investment manager, announced the acquisition of a distressed multifamily portfolio consisting of five properties facing foreclosure in Dallas, TX, Nashville, and Knoxville, TN.
S2 invested $60 million of rescue capital in a new joint venture with the existing Limited Partner through a structured preferred equity investment and secured a new 5-year $170 million senior loan through ACORE Capital. S2 will take over as the general partner with full operational control across property, asset, and construction management plus major decision rights to protect the preferred equity investment. The transaction was sourced off-market.
The five properties are located in markets with growing demand for multifamily housing and limited new supply:
Landmark at Gleneagles at 4909 Haverwood Lane, Dallas, TX, offers spacious 1 and 2-bedroom units, swimming pools with natural landscaping and easy access to shopping, dining, and entertainment.
Stone Ridge at 500 Piccadilly Row, Antioch, TN (a Nashville suburb) offers generously sized 1 to 3-bedroom units with patio/balcony, 2 swimming pools and sundeck.
Hickory Highlands at 100 Hickory Highlands Dr, Antioch, TN, offers 1 and 2-bedroom units, 9-foot ceilings, 3 swimming pools, and is located near Percy Priest Lake.
North Park Apartments at 5237 Tillery Rd, Knoxville, TN, offers 1 to 3-bedroom units and a park-like setting with biking and hiking trails.
The Park at Fountain City at 2132 Adair Dr, in Knoxville, TN offers 1 to 3-bedroom units and nearby walking and biking trails.
Ryan Everett, Managing Director, Head of Acquisitions of S2 Capital, said, “This transaction is a great representation of how S2 is taking advantage of targeted distress in today’s market. Our vertically integrated operating platform, in tandem with our discretionary capital, positioned us as the preferred partner to step in as the new GP and programmatically address the in-place operating issues through the implementation of a new business plan.”
“This investment allows us to expand our geographic footprint to Tennessee, where we have planned to invest in the Nashville and Knoxville markets for several years. Our internal data analytics platform projects Southeast Nashville to be a top quartile submarket for investment, given the continued year-over-year demand growth of 11% while supply and permits have plummeted by 80% to less than 2.5% of inventory, coupled with expected strong household formation and in-migration.”