Boston Capital’s Multifamily Bet

Alpharetta, Georgia, might not be at the top of every property investor’s wish list.

But for multifamily investment specialists Boston Capital Real Estate Partners, buying a B-class apartment development in this growing city made perfect sense.

BCREP recently bought into the market, picking up Lakes at Windward, a 294-unit development, as a value-add play.

Alpharetta has experienced a boom in new technology employment, and the local economy has been boosted by investments in new infrastructure, says Mark Dunne, BCREP managing director.

Dunne says the Alpharetta market has added a total of about 70,000 new jobs while apartment construction has remained muted because of planning restrictions.

The apartments and townhouses in the development will be overhauled, with new lighting, stainless steel appliances, granite countertops, and other fixtures. Communal facilities on the 30-acre property will also be overhauled.

Despite a sense that some markets may experience an oversupply of new apartments, Dunne says development has not been overdone. And a high concentration of developments were A-grade or super-luxury apartments.

“The market that we are going for is a B property that has the ability to move up to a B+ or A– but is a different price point to that which is being built,” he says.

The firm takes a broad approach to investing in the sector. Since it was established in 2002, BCREP has invested about $1.3B in multifamily rental, development, acquisition, and value-add opportunities throughout the United States.

BCREP has more than 2,150 multifamily assets in its portfolio, including 153,500 apartments. The firm is in the midst of raising a new, larger fund structure, but Dunne declined to comment further on plans for the vehicle.

Dunne tells PrivcapRE that he feels it is a good time in the real estate cycle to “acquire assets that either have physical rehab that needs to take place” or need to be recapitalized.

Dunne says the firm does not rule out investing in any U.S. market, but most of its investments have been along the coasts, in the Southwest, and in Denver, with select investments in the Midwest.

“We invest throughout the U.S., and we do different things at different times in different places where we perceive opportunity, “ Dunne says. “We don’t state that we won’t go into such and such a market. If it makes sense, we strike.”

BCREP has also recently made affordable apartment acquisitions in Virginia and West Virginia and has invested in affordable housing developments in North Carolina.