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.