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Real Estate Briefs

Dallas-Based S2 Capital Surpasses Blackstone As Most Active Buyer of Multifamily in DFW

Plus: Details on Hillwood Communities' new single-family-rentals project in Argyle and Northlake; DFW's industrial demand at a 9-year high; and more.
By Carla McCanna |
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Courtesy S2 Capital

Dallas-based national multifamily investor, S2 Capital has added 14 properties to its portfolio that spans both Dallas-Fort Worth and Houston—totaling 4,455 units with a total of 11 properties based here in North Texas.

According to Real Capital Analytics, S2 Capital is now the No. 1 most active buyer of multifamily in Dallas-Fort Worth in the past five years with its latest acquisition.

Each of the 14 properties was built between 1979 and 1987, and S2 has already begun planning renovations for the exterior and interior of each asset. In an attempt to “offer current and prospective residents an enhanced community experience,” some of the exterior renovations will include enhanced pools, fitness centers, leasing offices, clubhouses, and fresh paint and siding. Similarly, it plans to give each interior a facelift with new flooring, countertops, kitchen and shower tile, light fixtures, hardware, and appliances.

Scott Everett, founder and CEO of S2, told D CEO: “We believe DFW is now the best multifamily investment market in the country. You have to be bullish about a market with record in-migration, a business-friendly climate, household income growth, manageable inventory levels, and strong housing demand. We are very excited about the future of Dallas.”

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Harvest SFR rendering Courtesy Hillwood Communities

Hillwood Communities Partners with BB Living on Single-Family Rental Homes in Argyle

Developer Hillwood Communities has partnered up with a build-to-rent market leader, BB Living, to develop a single-family rental neighborhood at the Harvest community in Northlake and Argyle.

With construction underway, Hillwood Communities and BB Living plan to deliver 191 homes in the new development—each ranging from three to four bedrooms and between 1,800 and 2,500 square feet. BB Living has designed floor plans for the new Harvest homes, and pre-leasing will begin in July 2022.

Located just north of State Highway 114, at I-35W and FM 407, amenities to the properties will include on-site management as well as the existing amenities and award-winning lifestyle program of the Harvest community; known as an “agrihood,” Harvest is a tight-knit community where the residents can enjoy a commercial farm, gardens, an 11-acre lake, four pools, playgrounds, miles of parks and trails, event venues, workout facilities, a dog park, and a multitude of events and activities put on each year by an on-site lifestyle team.

“Single-family for lease homes are in high demand,” said Fred Balda, president of Hillwood Communities and the developer of Harvest. “This new product not only allows families who don’t want home ownership a chance to live in a great community like Harvest, they are a perfect solution for buyers in transition and relocation buyers new to the area. We teamed with BB Living for this new venture because they build a first-class product and experience that feels like an extension of our master plan.”

BB Living was one of the first to develop purpose-built, single-family, build-to-rent communities, with its first community being built from the ground up in 2012. Following its success in Phoenix, BB Living partnered with Toll Brothers to expand the concept nationwide. In total, BB Living has completed over 5,000 homes across ten markets.

“We’ve been doing this for a decade now and have learned a lot of lessons,” said Branden Lombardi, president of BB Living. “Our residents want a sense of community, and Harvest is very intentional about delivering that. Renting was not always viewed as a good option, but we are changing that perception by delivering unique neighborhoods in great communities, resort-style amenities, superior locations, and a focus on the resident experience.”

Carolina Beverage Provided Distribution Space by Hillwood at AllianceTexas

In other Hillwood news: Carolina Beverage Group has committed to a new distribution center lease at AllianceTexas.

As a longtime corporate resident with a manufacturing facility already located within AllianceTexas since 2014, this new project marks an expansion of operations for Carolina Beverage Group as it increases its square footage within the new Alliance Center North 9.

“Carolina Beverage Group has been an outstanding and highly valued corporate resident of AllianceTexas for nearly a decade,” said senior vice president of Hillwood, Reid Goetz, in a statement.

The industrial development strategy of “building for future needs,” aligns well with supporting Carolina Beverage Group’s growth, Goetz said.

Construction of the spec facility, Alliance Center North 9, began in December 2021 and will now serve as a state-of-the-art distribution center for Carolina Beverage Group in support of their bottling and filling facility, according to the release.

Located at the southeast corner or North Beach Street and Litsey Road in Denton County, Alliance Center North 9 features a convenient location with direct access to Interstate 35W, the I-35W Interchange, and various AllianceTexas amenities such as the Alliance FedEx Ground Hub, two UPS Ground Sort Hubs, the FedEx Express Southwest Regional Air Hub and Amazon Air Regional Hub, and BNSF’s Alliance Intermodal Facility.

More logistical amenities to the facility include 36-foot minimum clear height, 60-foot loading bays, two large truck courts, and various trailer parking spaces. 

“AllianceTexas has given us access to world-class amenities focused on furthering our growth and we are excited to expand into our new space at Alliance Center North 9,” said Brian Demos, president and CEO of Carolina Beverage Group. “We are now able to continue tapping into those amenities while seamlessly serving our growing footprint across the country.”

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Courtesy Newmark

Newmark To Represent 33-Asset Industrial Portfolio in Midland’s Permian Basin

Newmark is marketing a new industrial offering, Energy Related Properties (ERP). Located in Midland’s Permian Basin, this 33-asset industrial portfolio sits on one of the largest oil fields in the world.

Sitting on 160.7 acres of land, the portfolio includes 33 single and multi-tenant net leased assets that add up to 662,714 square feet. According to a press release, the properties are currently 91% leased and have maintained an average occupancy of 90% for the last five years.

The sale opportunity is being represented by Newmark’s capital markets group headed by vice chairman Matt Berres.

“This is an extremely rare opportunity to acquire a masterfully curated portfolio of the best assets in the Permian Basin and a significant market share position,” said Berres. “Global oil markets are exceptionally tight given current geopolitical tensions and possible disruption to supplies. In line with the wider increased energy production of the Permian Basin, this portfolio stands to benefit significantly from these market dynamics.”

Transwestern’s Industrial Market Report Shows Availability at 9-Year High

According to Transwestern’s most recent Dallas-Fort Worth Industrial Market Report, the Dallas-Fort Worth industrial market posted 8.6 million square feet of positive net absorption in quarter two of 2022.  absorption over the last 12 months was 36.1 million square feet.

The market report for this quarter revealed an acceleration of rent growth in the Dallas-Fort Worth area. In fact, industrial rent growth rose to 13 percent this quarter, and flex rent growth increased 9% from last year, according to the report.

Speculative construction set another record with developers delivering nearly 13 million square feet of new inventory this quarter; and speculative construction reached a record high of 67 million square feet.

Additionally, the area vacancy rate remained flat at 5.5 percent. although, with unprecedented levels of construction, Transwestern estimated that industrial vacancy could reach 9 percent in the coming 12 months with the surplus of new inventory coming to the market and many companies eyeing possible recession.

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