AMC Investments, the largest capital source for aggressive multifamily buyer Tides Equities, has put at least $322 million into Tides deals over the last five years, The Real Deal has learned.
AMC bought equity positions in 45 of Tides’ multifamily acquisitions — coming out to more than 10,000 units, as of December, according to investment documents written by AMC and obtained by TRD. On AMC’s website last month, the firm listed 51 properties linked to Tides, but has since removed all references to the company.
Since its formation in 2016, L.A.-based Tides has pooled money from a number of L.A.-based commercial real estate firms, according to sources familiar with the company’s investment strategy, including AMC, Beverly Pacific and Mountain Pacific Holdings.
Based in Beverly Hills, AMC is both one of Tides’ most frequent and earliest investors — its first deal was in February 2018. Tides purchased a 187-unit complex in Phoenix for $15.3 million — an AMC entity put $3.5 million into the deal.
AMC did not respond to requests for comment.
From 2021 to mid-2022 — when interest rates were low and multifamily investors like Tides were pouring billions into deals across the Sun Belt — AMC partnered on 31 deals with Tides, according to investor documents.
Its largest equity injection totaled to $11.5 million, when Tides bought a 206-unit complex in Phoenix for $56 million. In investor marketing materials, AMC said it’s expecting the property to be sold in 2025.
The marketing materials also give insight into Tides’ pitch to investors: Buy at a high price, make speedy renovations (six units a month), hike up rents (at least 18 percent in the first year) and flip the property for a profit. During that time, Tides would score a 6 percent project management fee. A 20 percent return was marketed for some investors.
Last month, Tides sent a letter to investors telling them it faces cash issues and they should expect cash calls in the future. Given the firm often used floating-rate loans for acquisitions, its debt payments on the properties have soared.
At least nine commercial mortgage-backed securities loans tied to Tides’ properties are on servicer watchlists for low debt service coverage ratios, meaning Tides is not making enough income from the properties to service the debt.
None of the properties AMC has invested in are on servicer watchlists, according to a TRD analysis of Morningstar Credit data.
AMC has also allegedly already given more money to help support Tides this year.
In January, AMC formed what it called a “capital infusion fund,” through which it expected to raise $20 million, according to a filing with the Securities & Exchange Commission. A source familiar with the matter said the cash went towards Tides deals.
Two weeks before Tides sent out its investor letter, AMC opened a second $20 million capital infusion fund, according to SEC filings. It’s unclear whether that fund will also go towards Tides properties.
“Tides has consistently exceeded initial projections on every investment AMC has made with them,” AMC wrote in investor documents, advertising an investment opportunity in December for a 156-unit complex in Phoenix. “While past performance is no guaranty of future returns, AMC is very pleased with the results of the properties that have been joint ventured with Tides to date.”
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