When Manhattan Beach, California-based apartment owner Magma Equities wants to buy an apartment property, it’s looking for a couple of characteristics.
“Every one of the assets that we have acquired has been off-market in some fashion or another,” Magma’s Director of Acquisitions Scott Ogilvie told Multifamily Dive. “Seventy-three percent of the assets that we've acquired have been from owners that self-manage their assets.”
Magma continued its tradition of buying off-market by purchasing a two-property, 820-unit suburban value-add multifamily portfolio in Texas from Moody National Cos in October. The company partnered with Walker & Dunlop Investment Partners to acquire the properties — the 580-unit Village at Bellaire in Houston and the 240-unit Lost Spurs Ranch in the Fort Worth submarket of Roanoke.
The properties fit Magma’s strategy of repositioning Class A and B apartment communities. The company plans to implement enhanced management operations and physical improvements, including a modernized interior renovation program and exterior upgrades at the communities.
“The sellers’ emphasis was really on managing for occupancy, which has allowed rents to fall behind the competitive set,” Ogilvie said. “That creates a significant market opportunity.”
Village at Bellaire, built in 1990 and 96% occupied at the time of the sale, has one- and two-bedroom apartment homes housed in 25 three-story residential buildings. Its amenities include a clubhouse, two swimming pools, a hot tub and spa, a 24-hour fitness center, a business center and grilling and picnic areas.
Lost Spurs Ranch comprises one-, two- and three-bedroom apartment homes across 12 three-story residential buildings completed in 2001. The property, which was 99% occupied at the time of sale, has an oversized swimming pool, a 24-hour fitness center and half basketball court, a media room and Wi-Fi café and a new playground.
With the acquisition, Magma now owns 3,440 units in Texas. It has acquired $667 million in assets in Dallas, Houston, San Antonio, Fort Worth and Austin since establishing a regional headquarters in Dallas in November 2021.
“We made a strong push to grow our portfolio in Texas,” Ogilvie said. “Historically, Dallas and Fort Worth have proven to be the most resilient markets during economic headwinds. A lot of that has to do with the numerous demand drivers in the market — corporate migration, strong school systems and diversity among the employment base, coupled with the fact that Texas is such a business-friendly environment.”
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