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S2 Capital acquires 4,445-unit multifamily portfolio spanning DFW and Houston

Dallas-based firm now tops Blackstone as most active buyer in DFW area

S2 Capital's Ryan Everett
S2 Capital's Ryan Everett (LinkedIn, iStock)

Dallas-based investment firm S2 Capital has closed on the purchase of a major multifamily portfolio stretching across the Dallas-Fort Worth and Houston metros, totaling 4,445 units across 14 buildings built between 1979 and 1987. The financial terms of the transaction were not disclosed.

S2 Capital has so far invested in over $10 billion in the area since its founding in 2012, and with this purchase, it tops Blackstone as the most active buyer in the Dallas-Fort Worth area over the last five years, according to Real Capital Analytics cited in a press release.

S2 has acquired several other properties in the DFW area recently as well, such as a 266-unit multifamily community in Plano, another multifamily portfolio of over 1800 units across Dallas-Fort Worth and Austin, and two high end properties within the Dallas area totaling over 600 units.

A S2 spokesperson cited booming in-migration and corporate relocations like Goldman Sachs as the main driver for its investment in the multifamily market.

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JLL brokered the sale, and NorthMarq arranged the financing. S2 plans to renovate all of the properties over the next two years.

“The run up in mortgage rates for the single-family market has exacerbated a broader affordability issue leaving a lot of people looking to rent as the more affordable option,” said Ryan Everett, VP of Acquisitions at S2, in the release.

The DFW area has been a magnet for real estate investors of late, attracting more investment than either New York or Los Angeles in the first quarter of 2022. Investors poured almost $13 billion into DFW properties — more than double the investment volume in the first quarter of 2021.

S2 Capital is one of the most active multifamily investors in the country, with a portfolio spanning Texas, Florida, North Carolina and Arizona. Its strategy is to concentrate on Class B properties providing workforce housing in growing markets.

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