(Bloomberg) -- TruAmerica Multifamily is teaming with Blackstone Group LP to acquire apartment buildings in Denver and Seattle for $126.5 million.
The deal, which marks the Los Angeles-based real estate investor’s first transaction with the private equity giant, encompasses 635 units at two communities, one in each city, TruAmerica said in a statement. The buildings, while about 94 percent occupied, have barely been renovated since being constructed about 30 years ago, giving the new owners an opportunity to improve the properties and collect the upside.
“The value-add opportunities available at each property are highly attractive,” Zach Rivas, director of acquisitions at TruAmerica, said in the statement.
The company’s partner on the purchase is an affiliate of Blackstone Real Estate Income Trust, a nontraded real estate investment trust sponsored by New York-based Blackstone Group. The seller wasn’t disclosed.
Apartment values soared to records during the past decade as U.S. households turned to renting in the wake of the financial crisis. More recently, gains in coastal cities like New York and San Francisco have slowed amid a glut of construction of high-end rentals. Smaller cities such as Denver are still poised for growth, according to data provider Axiometrics.
For Blackstone, the deal “is consistent with our strategy of teaming with best-in-class operators to acquire high-quality, stabilized properties in growing markets,” Paula Chirhart, a spokeswoman for the firm, said in an emailed statement.
Peter Grauer, chairman of Bloomberg LP, is a non-executive director at Blackstone.
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