Bahrain bank buys $250m US property

Bahrain bank buys $250m US property

International Investment Bank (IIB) yesterday announced the acquisition of a $250 million, 2,400 unit multifamily residential portfolio in partnership with US-based Atlas Residential.

The Bahrain-based Islamic investment bank’s board member and chief executive Aabed Al Zeera told the GDN that the bank expected to exit the investment after five to seven years, netting a return on investment of 16 per cent per annum.

The ‘class A’ portfolio was acquired from Dallas-based Pillar Income Asset Management and completed on December 30 last year.

Existing senior debt for the portfolio, which is insured by US Department of Housing and Urban Development (HUD) was assumed during the transaction, with Macquarie Bank providing $71m in mezzanine financing.

The 11-property portfolio is primarily located in Dallas, Texas but includes assets in the Houston, Midland/Odessa and El Paso.

The IIB Atlas venture was created to acquire, improve and operate these assets to capitalise upon their long-term fundamentals.

Atlas Residential Management will provide asset management for each of the properties and will effect the cosmetic enhancement and physical upgrades planned for each of the properties.

“This partnership will create a platform and provide an opportunity for our investors seeking stabilised cash yields to participate in the booming Texas economy, which continues to support a robust multifamily market,” Mr Al Zeera said during a Press conference yesterday, called to announce the acquisition.

“Our investors will be able to earn a healthy current cash return in this very stable Class A portfolio.

“Our bank has been seeking investment opportunities in the US over the last couple of years and believes that this portfolio will meet the return expectations of our investors given that the US multifamily market is poised for continued growth,” he said.

The acquisition of “these high quality multifamily residential apartment buildings” was in keeping with the bank’s core strategy, IIB chairman Saeed Al Fahim said.

“Our focus is on investment opportunities that deliver attractive returns for our investors and we are excited about our partnership with Atlas on this project as well as similar endeavours in future,” he said.

Atlas Residential chief executive Steven Ivankovich said the firm was grateful to partners IIB and Macquarie for “sticking with us during a complicated HUD loan assumption process”.

“This acquisition reinforces our belief in the Texas market where we have a long and successful track record of owning and managing diverse apartment portfolios.

“Atlas intends to acquire additional similar assets in major markets during the year,” Mr Ivankovich said. Saker Capital acted as adviser on behalf of Atlas Residential.