Passco Companies, a privately held California-based commercial real estate company that specializes in real estate acquisition, development, and asset management throughout the U.S., has acquired two luxury multifamily communities totaling 602 units: Canal 1535, a 330-unit asset in Downtown New Orleans, and Sawgrass Point, a 272-unit asset in the Baton Rouge metropolitan area submarket of Gonzales, Louisiana. Both assets closed at contract pricing despite a volatile capital markets environment.
These acquisitions bring Passco’s current holdings in the state to 1,690 units and exemplifies the firm’s strategy of identifying highly amenitized, best-in-market multifamily properties poised to benefit from strong fundamentals and growing renter demand, according to Colin Gillis, Senior Vice President of Acquisitions at Passco.
“Based on our long-standing relationships and deep experience in multifamily throughout market cycles, our team has continued to successfully identify and secure top assets in growing business and cultural hubs throughout the country,” explains Gillis.
Caleb Marten of KeyBank Real Estate Capital’s Commercial Mortgage Group arranged acquisition financing on behalf of Passco Companies for both transactions.
Passco’s two recent acquisitions include:
Canal 1535
Passco Companies has acquired Canal 1535, a 330-unit luxury Class A multifamily high-rise community situated within the heart of historic Downtown New Orleans, marking the firm’s first asset in the city.
“This community is a one-of-a-kind property in an irreplaceable location, situated within a market that rarely sees apartment trade activity,” says Gillis. “We were able to take advantage of a truly once-in-a-generation opportunity to acquire a property of this caliber for a basis far below today’s replacement cost.”
Gillis adds that New Orleans has an oft-overlooked, high-end demographic that is paying rents for top-end assets that are on par with the country’s gateway markets.
“Canal 1535 is one of the most special and unique assets in the Passco portfolio that offers elevated, convenient living with easy access to the vibrancy of New Orleans,” continues Gillis. “Residents at the community benefit from the region’s diverse, thriving economy and exceptional walkability, by being embedded within one of the best dining, entertainment, and cultural destinations in the country.”
Gillis also adds that the Passco team identified an opportunity to obtain a Green Globes certification, which help secure competitive financing terms. Both Passco and the seller were represented by Mike Kemether of Cushman & Wakefield and Larry Schedler, Cheryl Short, and Christian Schedler of Larry G. Schedler & Associates, Inc.
Kemether says: “The Passco team recognized the tremendous value of this property’s best-in-class amenities package and central location, in close proximity to the plentiful employment of the New Orleans CBD and BioDistrict Medical Center. Provident, the community developer, foresaw the area’s strong potential when carrying out the vision for this community, which led to a successful transition from developer to owner.”
Schedler adds: “Canal 1535 is a premier mid-rise multifamily community in the state of Louisiana. The property is strategically positioned in the center of downtown New Orleans and within walking distance to the French Quarter – a truly irreplaceable asset on Historic Canal Street.”
The property, which will be managed by Greystar, provides residents with garage parking, a well-appointed clubhouse with resident lounge, a resort-style heated swimming pool, a state-of-the-art fitness center, resident business center with PC and Mac computers, a private conference room, a community kitchen and courtyard entertainment area, a 5th-floor deck overlooking Canal Street, a covered putting green, a covered outdoor dog park and dog grooming station, bike storage, package lockers, rentable storage rooms, valet dry cleaning delivery services, a furnished guest suite, and trash chutes on each floor.
Unit amenities include panoramic city views, quartz countertops, espresso kitchen cabinetry, GE stainless steel appliances, built-in microwave ovens, tiled backsplash, undermount sinks, high arc faucets, full-size washer and dryer appliances, smart home locks with keyless entry, Nest thermostats, USB ports throughout, private balconies, garden tubs, walk-in showers with frameless glass doors, and walk-in closets.
Canal 1535 is located at 1535 Canal Street in New Orleans, Louisiana.
Sawgrass Point
Passco Companies has also purchased Sawgrass Point, a 272-unit luxury, Class AA multifamily community in the Baton Rouge submarket of Gonzales, Louisiana. This acquisition brings the firm’s portfolio in the Baton Rouge metropolitan area to three multifamily properties exceeding 800 units, notes Gillis.
“We’ve identified greater Baton Rouge as a market with solid fundamentals that is poised for significant long-term growth,” says Gillis. “This asset is situated within one of the best submarkets, Ascension Parish, which has the highest per capita income in Louisiana and ranks #1 in the state for population growth. Further, we will continue to benefit from amassing economies of scale in the market, with all three of our Baton Rouge assets managed by Arlington Properties.”
“This is an exceptionally crafted community that is well aligned with our strategy to acquire multifamily properties in secondary and tertiary markets that capture the lifestyle-oriented, renter-by-choice demographics,” says Gillis. “The developer had the foresight to incorporate several next-generation amenities, as well as build the asset to the highest National Green Building Standard.”
Passco and the seller were represented by Chad Rigby and Saban Sellers of Stirling Investment Advisors (SIA) and Telly Fathaly of Walker & Dunlop.
Rigby notes: “Multifamily assets remain an attractive investment, especially in high-growth submarkets like Gonzales and the surrounding Baton Rouge area. We enjoyed working with Passco and our partners at Walker & Dunlop through this process and are excited to see this deal come to fruition. SIA and Walker & Dunlop are proud to have played a role in such an excellent acquisition and disposition opportunity for our clients.”
Sawgrass Point, which has maintained an occupancy of 97% and higher since lease-up, provides residents with immediate access to Interstate 10 and is located within a 20-minute drive of the major employment centers of East Baton Rouge, and an approximately 45-minute drive from New Orleans.
The gated community offers a car wash station, 24/7 package lockers, a resort-style pool, a large fitness center and yoga room, group fitness classes with fitness on demand, an outdoor kitchen pavilion, a spacious dog park, a dog washing salon, a playground, 24-hour emergency maintenance, pool table, elevator service, air-conditioned interior corridors, a gift-wrapping room, ice machines, an on-site coffee bar, and a business center.
Best-in-market unit amenities include quartz countertops, stainless steel appliance packages, walk-in showers and soaking tubs, kitchen islands, spacious balconies, walk-in closets, faux wood blinds, and garages with select townhomes.
Sawgrass Point is located at 2163 Veterans Boulevard in Gonzales, Louisiana.
Originally published by www.multifamilybiz.com.
