Redwood Capital Group Continues $400 Million Acquisition Spree

by Stephen Ursery

Redwood Capital Group (Redwood), a vertically integrated multifamily investment manager, today announced it has acquired Brook Run, a 182-unit apartment community in Arlington Heights, Ill., and Wilder, a 381-unit apartment community in Austin, Texas. The acquisitions, which were separate transactions, reflect Redwood’s commitment to aggressive and strategic national growth plans to double in size by 2025.

Including these transactions, Redwood has completed six acquisitions totaling approximately $400 million in value and 1,706 apartment homes over the last 12 months. All of the deals have been sourced either directly off-market or through a limited offering as a result of Redwood’s national footprint and relationships. The rapid growth of the company’s portfolio is part of a five-year strategic plan to double the size of Redwood’s portfolio, which was valued at $1.7 billion in apartment assets under management at the start of 2021. The company’s portfolio of almost 9,000 units is concentrated in the Southeast, Southwest and Midwest.

Redwood projects an additional $200 million of deals in 2021 as its pipeline remains very active.  Redwood’s investments team is led by Managing Directors Bill McDougall and Field Stern in Chicago with acquisitions efforts supported by Directors Ryan Steppe and Bill Rose in Atlanta and Dallas, respectively.

“This is a very exciting time for Redwood as we continue to execute our plan to expand our portfolio swiftly but also judiciously by making sure we’re acquiring communities that will deliver the targeted returns,” said David Carlson, managing partner and co-founder of Redwood. “One of the many exciting elements of this recent spate of acquisitions is that they have all been off-market, limited-market and relationship-driven deals. That provides powerful testament to the top-notch network, reputation, flexibility and adaptability of the Redwood investments team.”

Field Stern, head of capital markets, added that “several of these acquisitions also have been capitalized by three new institutional partners, which is another huge accomplishment and something we are very proud of.”

In keeping with Redwood’s goal of vertical integration, both Brook Run and Wilder are being managed by Redwood Residential, its property management subsidiary. Redwood Residential has grown almost 100% since 2019 and is approaching over 5,000 units under management nationally with regional offices in Atlanta and Dallas.  The property management portfolio is projected to double again in the next 24 months.

Brook Run is in Arlington Heights, a sought-after suburb situated 25 miles northwest of Downtown Chicago. The community offers convenient access to major employment centers, well-regarded public schools, popular retail and downtown Chicago via I-90 or the Metra commuter rail. The property features one-, two- and three-bedroom units. Redwood plans to renovate all the unit interiors to include vinyl plank flooring, granite countertops, white cabinetry, kitchen backsplashes, updated fixtures and entry closet benches. Common-area amenities include decorative ponds, a clubhouse with leasing center and resident lounge, a resident business center with computers and an outdoor swimming pool with multiple cabanas and lounge seating.

“Brook Run represents an outstanding value-add opportunity,” McDougall said. “This is a strong community in a thriving submarket, and we’re confident that our in-unit improvements, exterior and landscape enhancements and the onsite skill and expertise of Redwood Residential will make this a best-in-submarket living experience.”

Wilder is a newly constructed, Class A, garden-style community in the South Austin submarket. The property offers panoramic views of the South Austin Hill Country and features a resort-style pool with cabanas, a state-of-the-art fitness center with a private cross-training room, a covered yoga area with views of the pool and surrounding hills, a pet-washing station and a LuxerOne package room.

In-unit amenities include quartz countertops, stainless steel appliances, designer cabinets with true soft close hinges and drawers, a Dwelo in-unit technology package, concrete or faux-wood flooring and walk-in closets.

“We are extremely bullish about the upside of Wilder,” Rose said. “With its fantastic location and its incredible early leasing velocity, the stage is set for a property that will attract and retain residents and deliver strong NOI.”

Leave a Reply