JANUARY 23, 2008
CT REALTY CORP./MACBETH APARTMENT SYSTEMS INC. ANNOUNCE MULTI-FAMILY JOINT VENTURE
NEWPORT BEACH, CALIF. – Newport Beach, Calif.-based CT Realty Corp. and Macbeth Apartment Systems Inc. of Carlsbad, Calif., have announced a new joint venture program to pursue multi-family acquisitions in the Southern California region.
According to CT Realty President Robert M. Campbell, CT Realty plans to re-establish its presence in the multi-family market in Southern California as a result of the new agreement with Macbeth. CT Realty previously owned approximately 6,000 apartments which were renovated and then sold over the last several years.
The company will use funds from its California Fund V and its new California Fund VI to acquire multi-family properties in San Diego, Orange, Riverside, San Bernardino and Los Angeles Counties. CT Realty had played an active role in the apartment marketplace for several years, but has been focusing on redevelopment of office, industrial and self-storage investments as well as other real estate products in the recent past.
Macbeth Apartment Systems has worked with CT Realty as a third-party consultant for several years providing construction management, market repositioning and management services for CT’s multi-family properties. The new agreement is structured as an equal partnership between CT Realty and Macbeth. CT Realty will provide equity financing as well as strategic planning for the acquisition of multi-family properties, while Macbeth will handle construction oversight, marketing and day-to-day management operations.
“We have worked successfully with Macbeth for the last dozen years and know that we are gaining an outstanding partner with solid expertise in construction, due diligence and management in the multi-family arena,” Campbell said. “As with our other real estate investments, we intend to focus primarily on the value-added apartment market. We currently have our sights on a number of multi-family properties with excellent upside potential throughout Southern California.”
Established in 1987 in San Diego, Macbeth Apartment Systems has managed more than 30,000 apartment units over the years. The company currently manages approximately 9,000 apartment units for other companies, as well as 1,100 units for its own portfolio. The total value of multi-family assets under management is $1 billion.
According to Charles Macbeth, president of Macbeth Apartment Systems, the new agreement with CT Realty reflects the company’s desire to move into apartment ownership in addition to building its management portfolio.
“We have been approached by several real estate investment firms interested in partnering with us over the last couple of years,” Macbeth said. “Most of the traditional sources of debt and equity financing want to reduce their risk by placing their funds with companies that have a hands-on approach with the ability to control costs, which is one of our strengths. Partnering with CT in a joint venture makes a great deal of sense for us. Not only does CT thoroughly understand the value-added marketplace with its substantial redevelopment and renovation requirements, it has an impressive track record of investments and the capital resources we need.”
Campbell added that the new joint venture is actively seeking value-added apartment communities throughout the region. Apartments that were converted to condominiums but did not completely sell represent one source of new product for CT/Macbeth. Communities with partially sold condominiums trigger numerous financial problems for the lenders, homeowners associations and ultimately the residents.
“With our new agreement with Macbeth, we will have the capability to act as a ‘white knight’ in such situations because we can finance, restructure, redevelop and then manage these properties for the benefit of all,” Campbell explained.
Other sources of apartment product will be real estate owned properties held by banks that need to dispose of their real estate assets. In addition, CT Realty/Macbeth will work with apartment and land brokers, consultants to the real estate development industry including engineers, architects, accounting firms and general contractors, as well as other developers interested in partnering on multi-family acquisitions, Campbell said.
Since its establishment in 1994, Newport Beach, Calif.-based CT Realty Corp. has completed more than 140 transactions totaling more than $2 billion, which includes acquisitions, sales, development and redevelopment. In addition, the company provides development equity financing through strategic partnerships with developers primarily in Southern California. The focus of CT Realty’s investment activities is to acquire well-located assets with the potential to enhance their value through a solid, hands-on approach. Asset types are industrial, suburban office, multi-family, senior housing, retail, golf course and self-storage properties primarily in the purchase range of $5 million to $75 million.
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