RADCO Cos. Purchases Seven Georgia- Based M-F Properties In Two Weeks

Commercial Property Executive
By Gail Kalinoski, Contributing Editor

The RADCO Companies spent a total of $56 million on seven multi-family communities in Georgia in the closing days of 2012, adding 3,000 units to its portfolio. The Atlanta-based real estate development company, which made $106 million in acquisitions for the year, said several more properties are under contract and expected to close soon.

“There is liquidity in multi-family, and the fundamentals make value-add multi-family the perfect fit for us today,” said Norman Radow,president and CEO of RADCO. “Our reputation has allowed us to raise equity privately, without resorting to institutional equity. We have maximum flexibility to buy when and where we believe we can do the most good, and provide excellent returns to those who entrust us with their hard- earned capital.”

The seven properties were financed through bridge debt from several lenders and $15.2 million in equity raised from private sources over the past 30 days. The firm raised a total of $31 million of equity for its purchases in 2012.

RADCO, a real estate turnaround specialist, closed on 16 acquisitions within the last 15 months, according to Radow.

The most recent properties acquired include two adjoining complexes in Doraville, Ga. – Bella Villas, which has 63 townhomes, and Wyntree, a 164-unit apartment community. Other acquisitions were: Audubon Town & Country, 132 units in Fairburn, Ga.; Audubon Brook, a 94- unit property in Conyers, Ga.; Audubon Way, 98 units located next to the Gwinnett County Medical Center in Lawrenceville, Ga.; Meadowbrook Manor, 104 units in Lilburn, Ga.; and Park Lake, a 328-unit community in Norcross, Ga.

RADCO expects to close shortly on The Pavilion at Decauter, a 144-unit apartment community near Emory University.

“The soon-to-be acquired Pavilion apartment complex in Decauter is compelling because of its location, story and our already proven value-add business plan,” said Radow.

Noting that it’s near a planned county park, Radow said, “The renovation of Pavilion will further transform the immediate neighborhood.”

Two properties that did not need significant capital expenditures or substantial repositioning were Meadowbrook Manor and Park Lake, which RADCO rebranded as Ashford Lake.

“We have been fortunate enough to find opportunities that are a value on day one, with minimum capital required, strong existing cash flow and additional upside potential,” Radow said of those two acquisitions. “Both properties are stable assets, but they also have market-to- market and value-add opportunities.”

RADCO specializes in acquiring and repositioning underperforming multi-family properties. Radow said the other five apartment communities acquired in December fall into that category.

“We believe we are acquiring these five properties at a low basis and have good capital improvement, marketing and management plans to restore each to be competitive within their respective markets,” he said.

In August, RADCO announced that it had acquired a three-property, 402-unit apartment portfolio in Georgia for a total of $13.7 million. RADCO had been the asset manager for the portfolio on behalf of an equity fund for five years. The purchase included the acquisition of the equity and a restructure of the existing debt on the properties. RADCO planned to spend about $1 million in capital improvements on the acquisitions. The properties were: the 112-unit Ashford Place Apartments in Griffin, Ga.; the 160-unit Bear Creek Apartments in Conyers, Ga.; and the 130-unit Sierra Place Apartments in Atlanta.

Earlier in 2012, RADCO had picked up The Retreat at Windy Hill, a 654-unit apartment complex in Marietta, Ga., for $18.1 million. It has since been renamed Ashford Retreat.

Founded in 1994, RADCO has extensive experience managing and repositioning more than $4 billion in distressed real estate. In addition to its Atlanta headquarters, RADCO has an office in Los Angeles.