Photo by Huy Nguyen on Unsplash
SANTÉ Realty Investments, a private equity and real estate investment firm, sold a 13-property multifamily portfolio with nearly 1,600 units for $112 million. The portfolio, which contained apartment assets from across the southeast United States, was part of the SANTÉ High Yield Fund III.
The disposition was the final sale in the fund as SANTÉ closed it out. The firm did not disclose the buyer or locations of the properties. SANTÉ, which also has an office in Luxembourg, has a history of managing $2.5 billion in residential assets. The firm has properties or developments across the U.S. in Arizona, California, Indiana, Kansas, Missouri, Nevada, South Carolina, Tennessee, Texas and Washington, as well as in Spain.
Jeremy Guay, SANTÉ chief investment officer, said in a prepared statement the firm closed out the fund at a substantial value to investors. However, he noted the firm had made a strategic decision to pivot from investing in value-add properties like the apartments in the portfolio sale to less operationally intense assets.
New Ground Lease Focus
Guay said the new strategy would be focused on its ground lease program that provides sale-leaseback financing for real estate sponsors across the U.S. Earlier this month, SANTÉ announced a $570 million funding agreement for its new Ground Lease Fund. SANTÉ Realty Fund II is designed around the acquisition of ground leases and NNN lease real estate projects throughout strategically identified markets across the country.
The firm said the anchor investment comes from an undisclosed institutional investor. Since the underlying ground lease is guaranteed by a building, ground lease investments are extremely attractive to institutional investors, according to the firm. The $570 million will come in several tranches over the next 36 months. The first tranche is expected tomorrow, April 1.