Dive Brief:
- In a move to add more properties to its expansion Sun Belt markets, AvalonBay Communities announced Thursday that it is under contract to acquire eight properties in Texas from entities associated with Little Rock, Arkansas-based owner BSR Real Estate Investment Trust, according to a news release.
- The Arlington, Virginia-based REIT is acquiring two properties in the Austin, Texas, metropolitan area from BSR REIT and its operating subsidiary, BSR Trust, for $187 million. The sale is expected to close on or around March 31.
- In addition, AVB entered into an agreement with BSR REIT, BSR Trust and certain holders of Class B units of BSR Trust to purchase six properties in the Dallas-Fort Worth metropolitan area for $431.5 million. The sale is expected to close in the second quarter.
Dive Insight:
With the acquisition of the eight properties, AVB has doubled the size of its portfolio in Texas.
“The assets are suburban garden communities with an average age of 11 years, providing a strong complement to our current and planned development activity with rents at a more affordable price point, and allowing for increased operating synergies as we increase our scale in these high-growth regions,” Matthew Birenbaum, AvalonBay’s chief investment officer, said in the release.
AvalonBay’s Aquisitions
| Property | Units | Year Built | City |
| Auberry at Twin Creeks | 216 | 2005 | DFW |
| Aura Benbrook | 301 | 2020 | DFW |
| Cielo | 554 | 2015 | Austin |
| Lakeway Castle Hills | 276 | 2019 | DFW |
| Retreat at Wolf Ranch | 303 | 2017 | Austin |
| Satori Frisco | 330 | 2019 | DFW |
| Vale Frisco | 349 | 2021 | DFW |
| Wimberly | 372 | 1995 | DFW |
SOURCE: AvalonBay
In its fourth-quarter 2024 earnings call earlier this month, AVB signaled that it would increase portfolio allocation in its expansion markets in the Sun Belt.
“An increasing number of AvalonBay customers live in these markets, and we also see the benefits of diversifying away from certain risks, including increasing our exposure to areas with less regulatory risk,” CEO Ben Schall said on the call.
In 2024, the REIT boosted its expansion market presence from 8% to 10% of its portfolio. “We expect to make further progress toward our 25% expansion market target in 2025 and believe that we’re in an attractive window to facilitate this portfolio shift by acquiring and developing assets at a cost basis meaningfully lower than it has been over the past few years,” Schall said.
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