JRK Property Holdings announced several deals in the second half of 2024.
Now, the Los Angeles-based real estate investment firm appears to be experiencing another growth spurt, as it has added 684 units to its apartment portfolio after closing on apartment communities in Los Angeles and Washington, D.C., for more than $315 million total.
Despite the coasts being out of favor among some investors, JRK sees an opportunity. “We feel that many ‘blue’ markets nationally have been oversold and present good long-term value,” CEO Bobby Lee told Multifamily Dive.
JRK acquired the properties through its $1 billion Platform 5 Fund, a multifamily value-add and core-plus vehicle focused on high-quality assets built after 1990 with operational or physical repositioning opportunities, according to a news release shared with Multifamily Dive.
WestEnd25, a 10-story high-rise apartment building in Washington, is a short walk to the neighborhoods of Georgetown and Dupont Circle. The property, built in 2009, offers a mix of 283 large studio, one- and two-bedroom apartment homes, including 21 penthouse units.
JRK plans to update the property with a state-of-the-art fitness center, redesigned rooftop amenity spaces, resort-style pool and sundeck and updated unit interiors when a resident vacates. Berkadia marketed the property on behalf of the seller, identified by The Washington Business Journal as Washington, D.C.-based JBG Smith.
With the acquisition of WestEnd25, a 283-unit high-rise community, JRK enters the Washington, D.C. market — a metro area it has been tracking for several years. The firm wasn’t deterred by concerns about DOGE and government cuts when buying the property.
“We felt that the WestEnd25 property was being painted by that same brush even though it has very little exposure to end sectors being affected by these types of cuts — government or government contractor jobs,” Lee said. “Typically, we like to bolt on acquisitions in metro markets once we take a toehold, so I see Washington, D.C., as being a future growth market for us.”
Chase Knolls
The acquisition of Chase Knolls, a 401-unit garden-style community in Sherman Oaks, California, was financed in a joint venture with another JRK Fund, MF Opportunities III, a $200 million vehicle that targets 1989 and older, value-add to core plus product.,
Chase Knolls sits on a 14-acre site that spans nearly two city blocks in the heart of Los Angeles’ San Fernando Valley. The property was originally constructed in 1949, featuring 260 art deco apartment homes in 19 one- and two-story residential buildings.
In 2021, six modern two- and three-story residential buildings with 141 units, along with a clubhouse and resort-style pool and spa, were added to the property. JRK will begin a multimillion-dollar capital improvement to improve community amenities and common areas.
Chase Knolls is one of only 12 institutional apartment communities built in Sherman Oaks over the past 75 years, according to Cushman & Wakefield, which marketed the property on behalf of the seller.
The asset is situated near award-winning schools, offers walkability to a variety of retail options and provides access to surrounding major employment hubs, including Glendale, Burbank, Universal City, downtown Los Angeles and Warner Center, according to JRK.
JRK plans to deploy the remainder of Platform 5 and MF Opportunities III over the next 18 to 24 months.
“Stability in the Treasury and credit markets has provided a great window for us to acquire assets, and we expect to acquire $2 billion to $3 billion over the next 18 to 24 months as long as Treasury markets stay relatively calm,” Lee said.
JRK, with a strong balance sheet and the capital to make deals, has found limited competition for many of the assets that it's targeting, according to Lee.
“Many other bidders do not have the capital fully raised and are more susceptible to [limited partner] sentiment tied to the volatility of public equity and debt markets,” Lee said. “It is no coincidence that we are stepping on the accelerator pedal in the face of historical volatility in the equity markets.”
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