S2 Capital Expands Multifamily Holdings with New Property Acquisition in Southern States

S2 Capital Enhances Portfolio with Strategic Multifamily Acquisition

S2 Capital, a prominent multifamily investment manager headquartered in Dallas, has recently announced a significant acquisition, marking another milestone in its growth strategy. The company obtained a distressed multifamily portfolio consisting of five properties, totaling 1,768 units across major southern markets including Dallas, Texas, and Nashville and Knoxville in Tennessee.

This strategic move comes as S2 Capital deploys $60 million in rescue capital to establish a joint venture with existing limited partners. Additionally, they secured a substantial new senior loan of $170 million from ACORE Capital, ensuring strong financial backing for the operation and future renovations of the newly acquired properties.

The portfolio, a mix of both multifamily housing and investment opportunities, was sourced off-market, thus presenting S2 Capital with a unique advantage to manage the properties effectively. The five properties, each strategically located in areas that exhibit robust demand for multifamily housing coupled with limited new supply, are as follows:

1. Landmark at Gleneagles in Dallas, Texas: This property features spacious 1 and 2-bedroom units, beautiful swimming pools surrounded by natural landscaping, and provides easy access to various amenities including shopping, dining, and entertainment.
2. Stone Ridge in Antioch, Tennessee (Nashville suburb): Offers generously sized 1 to 3-bedroom units, alongside two swimming pools and sundeck areas.
3. Hickory Highlands also in Antioch, Tennessee: Presents 1 and 2-bedroom units featuring 9-foot ceilings and three swimming pools, and is situated conveniently near Percy Priest Lake.
4. North Park Apartments located in Knoxville, Tennessee: This property consists of 1 to 3-bedroom units in a park-like setting, inclusive of biking and hiking trails for residents.
5. The Park at Fountain City in Knoxville, Tennessee: Offers similar unit types with adjacent walking and biking trails promoting an active lifestyle.

Ryan Everett, Managing Director and Head of Acquisitions at S2 Capital, highlighted the acquisition as a prime example of how the company is leveraging current market sentiments to target distressed properties. He stated, "Our vertically integrated operating platform, coupled with our discretionary capital, places us as the preferred partner to step in as the new general partner and effectively tackle operational issues with a structured business plan."

Everett pointed out that the investment also signifies S2's strategic expansion into the Tennessee market, wherein they have been preparing to invest for several years. According to their internal data analytics, Southeast Nashville is forecasted to be a top investment submarket, boasting an impressive year-over-year demand growth of approximately 11%, while the supply and permitting rates have decreased drastically by 80%, creating a notable investment opportunity amidst strong household formation and in-migration expectations.

Founded in 2012, S2 Capital specializes in value-add and core-plus investments and has successfully handled approximately $11 billion in transaction volume, with a portfolio spanning over 49,000 units through various acquisitions. The company continues to target opportunities in rapidly expanding markets where job growth and population influx predict high rental demand.

As S2 Capital continues its growth trajectory, it remains dedicated to enhancing living conditions for residents while delivering solid returns to investors. Their comprehensive approach encompasses various sectors, including acquisitions, construction management, and asset management, ensuring cohesive strategy execution across all levels. For more extensive information on their initiatives and investment opportunities, visit S2 Capital's website.