Tides sells Inland Empire complex for fat profit
Multifamily owner paid $72M for 366-unit property in 2019, sold it in December for $103M
Tides Equities, a multifamily investment firm that has emerged as one of the most active buyers of apartments across the Sun Belt over the last two years, has offloaded a complex in San Bernardino County for a big profit.
The firm sold the 366-unit complex at 1699 East Washington Street in Colton for $103.2 million in December, according to property records filed with the county.
An entity linked to New York-based Drake Real Estate Partners bought the complex, records show. The firm, founded by David Cotterman, a former principal of Michael Dell’s MSD Partners, and Nicolas Ibañez, a member of one of Chile’s wealthiest families, did not respond to a request for comment.
Drake had been a partner in the deal, according to data from DBRS Morningstar, though the size of the firm’s stake was not disclosed.
Tides, run by Sean Kia and Ryan Andrade, bought the apartment complex for $72.2 million in 2019. In an email, Kia called the sale a “great win” for the firm.
The deal is run of the mill for Tides — buy an apartment complex, make quick renovations and offload it as quickly as possible. Over the last two years, Tides has raced to capitalize on low interest rates and double-digit rent growth across the Sun Belt.
This year, the firm was the 37th largest owner of multifamily properties in the U.S., with almost 32,000 units, a 65 percent increase from the prior year, according to the National Multifamily Housing Council.
However, rising interest rates have presented challenges for the firm, given Tides often uses floating rate debt to acquire properties.
When Tides refinanced the Colton property with a $72 million loan from MF1 Capital in 2021, it reported $4.53 million in net cash flow, according to DBRS Morningstar, which rose to $5 million as of June 2022. Tides had projected $5.4 million in net cash flow once it completed its renovations and leased up the property, data from the ratings agency shows.
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