Trion Properties acquires its fifth multi-family property in Portland
Hollywood, California-based Trion Properties acquired Bel Aire Court apartments, a 67-unit building located off Southwest Allen Boulevard.
Bel Aire Court, 12020-12275 Why Worry Lane, was acquired from a private investor for $9.2 million. Continental Partners arranged a $6.4 million loan to finance the acquisition. The five-year, fixed-rate loan was priced at 3.95 percent. Jordan Carter, Clay Newton, and Tyler Linn of Kidder Matthews represented the buyer, while Brian Dirks of Nicolan represented the seller.
Trion Properties is a private equity real estate firm specializing in multifamily investments along the West Coast.
Trion has completed $209 million in transactions, with a portfolio of $192 million in assets, generating an average internal rate of return above 30 percent. With its fully built-out operator platform, Trion has repositioned and stabilized undervalued assets, leveraging its expertise in real estate finance and renovation of multifamily properties to drive returns for its investors.
Over the last three years, Trion's affiliated entities have acquired 38 properties.
As Bel Aire Court is its fifth acquisition in the past two years in the Portland area, Trion Properties now owns 282 units here.
That makes Trion one of the most active buyers in the Portland market, according to Max Sharkansky, managing partner with Trion.
"The Portland metropolitan area is one of the strongest and fastest-growing multifamily markets in the nation right now," Sharkansky said. "The region's rapid job growth, solid economic fundamentals and high quality of life are driving resident demand for housing in this market, resulting in long-term growth potential for multifamily investments."
Portland's dynamic Silicon Forest drew the eye of Trion as Yahoo!, Salesforce and Squarespace take up residence here. Alongside tech, the apparel industry including Nike and Columbia Sportswear solidified the appeal of the deal.
"We continue to view Beaverton, located just seven miles outside of downtown Portland, as a submarket with strong growth fundamentals," Sharkansky said. "Nike is currently undergoing a 3.2 million square-foot, $380 million expansion of its headquarters, and is anticipated to add thousands of new jobs over the next few years. Further, Beaverton's strong history of rent growth, coupled with pent-up demand, translates to tremendous upside potential for this asset over time."
Beaverton's uptick in new multifamily construction hasn't maxed out the supply and demand, still counting less than 2.8 percent vacancies that Trion says indicates sustained resident demand.
Favorable fundamentals such as economic drivers, affordability and income growth make it one of the strongest performing submarkets in the Portland metro area, in Trion's eyes.
"As rents continue to soar in downtown Portland, many renters are being priced out and are migrating to the surrounding suburbs such as Beaverton and Hillsboro in search of affordability," Sharkansky said. "By acquiring and enhancing this property, we are providing renters with a high-quality, more affordable alternative to new multifamily construction in the urban core area."
Originally built in 1961, the garden-style community is made up of 15 buildings on 16 parcels located near downtown Beaverton and Highway 217.
Many of Trion's other Portland-area portfolio pieces are also located along the 217 corridor, in a strategy focused on commuting.
Bel Aire Court has nearly full occupancy already, so Trion will benefit from immediate cash flow and significant upside on recent leases and renewals, according to Sharkansky, who noted that the asset's in-place upside will mitigate downside risk.
The property's retention rates are above 90 percent, indicating long-term stability and strong net operating income.
"This asset was a rare find in the current Portland market," Sharkansky said. "While there remain opportunities to add value, the previous owner had already invested in extensive capital improvements, leaving it relatively well-maintained for an asset of this vintage. This acquisition, located near our Hidden Villas property in Beaverton, complements our existing Portland portfolio and will enable us to amass economies of scale, allowing us to improve operational efficiencies and generate strong, risk-adjusted returns to our investors."
Trion plans light renovations as units turn over, including fresh exterior paint, new cabinetry, stainless steel kitchen appliances and new countertops.