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Urdang buys California apartments

The private equity real estate firm has partnered with US-based real estate investment firm ConAm to acquire a 456-unit apartment complex in Sacramento, California. The pair plan to upgrade the property and increase rents.

Urdang, the real estate investment arm of BNY Mellon Asset Management, has partnered with San Diego, California-based multifamily specialist, The ConAm Group of Companies, to acquire an apartment block at Olympus Pointe in Sacramento, California. Financial terms of the deal were not disclosed.

The firms are planning to upgrade the building, called the Rosemeade, and increase rents. Urdang invested through its Urdang Value-Added Fund II, which closed in February on $463 million (€316 million). The vehicle primarily targets US office, retail, multifamily and industrial properties, with $20 million to $75 million of total capitalization per deal. The fund is expected to have a purchasing power of $1.3 billion, according to the firm, and has acquired nine properties to date.

ConAm, based in San Diego, has a portfolio of around 50,000 multifamily units, with approximately 5,200 properties in the Sacramento market.

Urdang, based in Plymouth Meeting, Pennsylvania, currently manages more than $2.2 billion in public real estate securities through Urdang Securities Management, and $1.2 billion in private real estate investments through Urdang Capital Management.

Multifamily is a growing sector among private equity real estate firms in the wake of the credit crunch and subprime crisis. Yesterday, Massachusetts-based Northland Investment Corporation picked up a portfolio of nine multifamily properties in Texas, paying $270 million for 2,985 apartment units. The deal, in Austin, Texas, is believed to be the largest multifamily transaction to date in the area. The properties were acquired through the firm’s Northland Fund III, which closed on $200 million in the beginning of 2008, and targets US multifamily assets.