Eastern Union Delivers Financing for a Total of 461 Two Single-Family Rental Units
Riparian Capital Partners of Chevy Chase, MD has secured $54.7 million in financing for two portfolios encompassing 461 single-family rental (SFR) units in Baltimore.
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The financing was arranged by David Merkin of Eastern Union, one of the country’s largest commercial real estate brokerage firms. Based in Bethesda, Mr. Merkin is a managing director in Eastern Union’s Mid-Atlantic Group.
The underlying portfolios, which were acquired by Riparian in October 2020 and December 2021 respectively, are chiefly located in long-term, stable workforce communities in the city of Baltimore, with a focus on renters utilizing Section 8 and similar voucher programs.
Ari Azarbarzin, senior director of Cushman & Wakefield’s Capital Markets Group, served as broker for Riparian’s acquisition of both portfolios. Mr. Azarbarzin is one of the leading brokers in the Baltimore area specializing in SFR transactions.
Both the acquisition and the refinancing carried five-year terms. Financing was provided through New York-based Roc Capital.
Riparian Capital Partners, a vertically integrated asset, property and construction manager, is one of the few SFR operators focused exclusively on the workforce housing segment of the market, targeting rents that are affordable at household income levels of 60-100% of the Area Median Income, while also emphasizing accessibility and value for lower-income renters utilizing housing vouchers. Together with its pipeline scheduled to close in the first quarter of 2022, Riparian holds more than $125 million in assets under management on behalf of its investors, one of the largest SFR and scattered-site portfolios in the mid-Atlantic region.
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The SFR sector has been attracting significant interest from investors. Nationwide, CoreLogic’s Single-Family Rent Index showed that single-family rents had increased by 9.3 percent in August 2021, compared to the year before.
“Single-family rentals have emerged as one of the fastest-growing asset categories in today’s commercial real estate marketplace,” said Kristoffer A. Garin, principal and chief executive officer of Riparian Capital Partners. “However, to date, capital allocators in the sector have overwhelmingly focused on higher-end locations and newer properties, making the workforce housing segment a compelling opportunity for operators with the capabilities and resources to capture higher yields while delivering an institutional-grade execution.
“In Riparian’s case, our best-in-class social impact effort further enhances our ability to deliver market-leading returns to our investors, while also realizing community-friendly outcomes in the face of a national housing affordability crisis.”
Mr. Garin also commented on the support Eastern Union provided for the transaction: “In a rapidly evolving segment of the capital markets landscape, David and his team had their fingers on the pulse of current terms and pricing,” he said. “They understood our strategy and requirements and continue to serve as a trusted advisor.”
“Because the housing market is so strong, SFR portfolios are in high demand in Baltimore and nationwide,” said Mr. Merkin of Eastern Union. “Renters like SFR properties because they enjoy the experience of single-family living, and affordability in this environment is in short supply.
“Riparian Capital Partners is ideally suited to play a leadership role in the SFR world,” he said. “Its leadership team has top-flight experience in both the capital markets space and in property management.”
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