ArgusLeader:In $52 million deal, Florida firm snaps up 18 Sioux Falls apartment complexes

ArgusLeader:In $52 million deal, Florida firm snaps up 18 Sioux Falls apartment complexes

Argus Leader
Press Release

In $52 million deal, Florida firm snaps up 18 Sioux Falls apartment complexes

A Florida real estate and property management company has made a major play into the Sioux Falls multi-family housing market.

Miami-based Tzadik Management says it has closed a $52 million deal to buy 18 apartment complexes located across Sioux Falls from four sellers. The apartment complexes include 721 total apartments.

Tzadik CEO Adam Hendry said his company has been searching the country for overlooked markets where housing values aren’t overheated. He found what he was looking for in Sioux Falls – a low-tax, business-friendly climate with low unemployment, a surging population and a lack of rental supply, he said.

“This market is fundamentally sound,” he said. “This checked all the boxes.”

The largest part of the deal was four apartment complexes from Murray Properties, including the Eagle’s Nest, Eastview, Lake Park and Arnold’s Park complexes, totaling 326 apartments. A deal with Ron’s Property Management included seven complexes, and Rensberger properties included six complexes totaling 143 units, most notably the Sycamore Courts complex. A final seller sold River Run apartment complex to Tzadik.

Tzadik currently owns about 4,000 apartment units in Florida. The company picked up additional apartment complexes in Georgia and Texas earlier this year.

“We’re open-minded,” Hendry said. “We’re very opportunistic.”

Tzadik is also looking at possible deals in Rapid City and other cities in the area, Hendry said. He hopes to turn his Sioux Falls operations into a regional hub for his properties. Hendry said it’s the largest multi-family deal he’s aware of in Sioux Falls and the first of its size featuring a company from Florida.

Residents of Tzadik’s Sioux Falls properties should be prepared for some rent increases. Hendry said many of the properties have rents that lag behind the market, and he intends to match it more closely, gradually raising rents over the next three years.

He touted his company’s management of the properties, the professionalism of its local administrative and maintenance staff, and its use of online portals to pay rent and make maintenance requests.

He said he’s already moved a property manager to Sioux Falls to work on the transition. Welcome signs are posted on many apartment building doors.

He committed Tzadik to spend a $5 million on upgrades and renovations to the properties to deal with deferred maintenance, landscaping and general improvements, he said.

“From a cash outlay, it’s very substantial,” he said.

Hendry and a friend started the company in Florida in 2007, on the brink of the Great Recession. When the housing market began to collapse, Tzadik started snapping up receivership status to acquire properties that could be resold. Tzadik eventually evolved into a company that owned and managed multi-family properties.

Hendry said he aims to stay ahead of an overheated housing market in Florida by diversifying out elsewhere in the U.S. Hendry said his company uses pricing and lease-term models that regularly account for supply and demand – something he didn’t see a lot of multi-family housing owners using in the Sioux Falls market.

But the local market is a “hidden gem,” he said. And he’s been working to acquire apartments in the city full-time since April.

“It’s been a wild ride,” he said.

Over 1,000 Off-Market Units Bought by Tzadik Management

Over 1,000 Off-Market Units Bought by Tzadik Management

ATLANTA, April 12, 2018 (GLOBE NEWSWIRE) — Tzadik Management announced Monday the acquisition of six off market, direct to seller, multi-family apartment communities in the state of Georgia. This acquisition totals 1,010 units that span between Houston, Dougherty and Clayton Counties. This marks yet another group of properties Tzadik has acquired outside the state of the Florida.

A groundbreaking acquisition for Tzadik Management, they now own and manage 27 communities throughout the Southeastern United States. “We are very excited to have been able to execute this acquisition. We have been looking to break back into the Georgia market for some time and we really felt this was the best opportunity to make it happen” said Founder and CEO, Adam Hendry.

Alexander Kaushansky, Vice President, Originations at Arbor Realty Trust, Inc., helped arrange acquisition financing for the portfolio. “It was a pleasure assisting on this sizeable reentry into the Georgia market,” Kaushansky said. “Tzadik has a strong vision for the future of these properties, and Arbor was able to support that vision with customized bridge financing combining excellent loan terms, speed and certainty of execution.”

Closing at just over $36 million, this deal is their largest acquisition since 2016 when they acquired 1,244 units across Orlando and Daytona Beach. This expansion is a trend the company is looking to continue. “We felt that this deal fit in line with our 5 year strategy of acquiring assets in secondary and tertiary markets to get us to 100,000 units” said Chief Investment Officer, Alex Arguelles. Tzadik has become one of the fastest growing Management companies in the Southeast over the past several years.

Tzadik is a fast growing, innovative, and driven real estate and property management company based in Miami, Florida. Since its formation in 2007, Tzadik has managed over $700 million in apartment complexes and over 11,000 units in over 20 states as well as the Caribbean. Through excellent management, a focus on company culture, and a tech driven style of operating, Tzadik management has established a reputation for building lasting relationships.

 

See full article here:

https://www.cnbc.com/2018/04/12/globe-newswire-over-1000-off-market-units-bought-by-tzadik-management.html

MarketWatch: 3,100 Quaternary Units Recapped by Tzadik in Groundbreaking Sioux Falls Two-State Portfolio

MarketWatch: 3,100 Quaternary Units Recapped by Tzadik in Groundbreaking Sioux Falls Two-State Portfolio

Marketwatch
press release

3,100 Quaternary Units Recapped by Tzadik in Groundbreaking Two-State Portfolio, Invests in Booming Sioux Falls Market

Tzadik Management closed on their latest attainment of 721 apartments in Sioux Falls, South Dakota in unique fashion on Monday. While simultaneously re-capitalizing on most of their Florida portfolio that was initially acquired back in 2014, Tzadik Management obtained the capital needed to close on multiple new apartment communities. This is yet another acquisition this year for Tzadik, who have closed on deals in Texas and Georgia in 2018.

This latest transaction is in line with the company’s recent investment strategy, targeting secondary, tertiary and quaternary markets to help facilitate their rapid portfolio growth despite inflated and distorted real estate markets. “We feel strongly that this latest addition allows us to both diversify our portfolio and increase our financial levers ahead of our industry competitors,” said Chief Financial Officer, Austin Griffin.

As one of the most fundamentally sound markets in the United States, Sioux Falls was very intriguing, providing some of the lowest unemployment rates in the US and a tremendous lack of rental supply despite the surging population growth. “Sioux Falls exhibits a multitude of demographic factors that should survive this ‘Melt Up’ and the forthcoming Big Short 2.0,” said Chief Executive Officer, Adam Hendry. These economic factors were the deciding influence for Hendry, who spearheaded the deal alongside Senior Vice President of Business Development, Michael Davalos. Davalos, who has been with Tzadik for the last several years, has helped entrench the company in several new emerging markets across the United States.

Tzadik structured what could be considered deal of the year, where $20M in preferred equity was raised via a family office with only a current pay, no accrual or profit share, thus reinvesting it in Sioux Falls, capitalizing on a healthy cash flow arbitrage by a loan from an institutional family office.

Tzadik is a growing, innovative, and driven real estate and property management company based in Miami, Florida. Since its formation in 2007, Tzadik has managed over $800 million in apartment complexes and over 15,000 units in over 20 states as well as the Caribbean. Through excellent management, a focus on company culture, and a tech driven style of operating, Tzadik management has established a reputation for building lasting relationships.

Globe News Wire: 3,100 Quaternary Units Recapped by Tzadik in Groundbreaking Two-State Portfolio

Globe News Wire: 3,100 Quaternary Units Recapped by Tzadik in Groundbreaking Two-State Portfolio

GLOBE NEWSWIRE
Press Release

3,100 Quaternary Units Recapped by Tzadik in Groundbreaking Two-State Portfolio, Invests in Booming Sioux Falls Market

Tzadik Management closed on their latest attainment of 721 apartments in Sioux Falls, South Dakota in unique fashion on Monday. While simultaneously re-capitalizing on most of their Florida portfolio that was initially acquired back in 2014, Tzadik Management obtained the capital needed to close on multiple new apartment communities. This is yet another acquisition this year for Tzadik, who have closed on deals in Texas and Georgia in 2018.

This latest transaction is in line with the company’s recent investment strategy, targeting secondary, tertiary and quaternary markets to help facilitate their rapid portfolio growth despite inflated and distorted real estate markets. “We feel strongly that this latest addition allows us to both diversify our portfolio and increase our financial levers ahead of our industry competitors,” said Chief Financial Officer, Austin Griffin.

As one of the most fundamentally sound markets in the United States, Sioux Falls was very intriguing, providing some of the lowest unemployment rates in the US and a tremendous lack of rental supply despite the surging population growth. “Sioux Falls exhibits a multitude of demographic factors that should survive this ‘Melt Up’ and the forthcoming Big Short 2.0,” said Chief Executive Officer, Adam Hendry. These economic factors were the deciding influence for Hendry, who spearheaded the deal alongside Senior Vice President of Business Development, Michael Davalos. Davalos, who has been with Tzadik for the last several years, has helped entrench the company in several new emerging markets across the United States.

Tzadik structured what could be considered deal of the year, where $20M in preferred equity was raised via a family office with only a current pay, no accrual or profit share, thus reinvesting it in Sioux Falls, capitalizing on a healthy cash flow arbitrage by a loan from an institutional family office.

Tzadik is a growing, innovative, and driven real estate and property management company based in Miami, Florida. Since its formation in 2007, Tzadik has managed over $800 million in apartment complexes and over 15,000 units in over 20 states as well as the Caribbean. Through excellent management, a focus on company culture, and a tech driven style of operating, Tzadik management has established a reputation for building lasting relationships.