Palladius Capital Management is adding nine more properties to its collection.
The real estate investment manager has acquired them for $579 million. The portfolio exceeds 2,500 units, breaking down to five multifamily and four student housing properties.
While the specific regions were not listed, Palladius said it targeted "high-growth markets" nationally that had positive trends in major areas including employment, education, re-urbanization, wage growth, and infrastructure development — for multifamily. As it pertains to the student housing assets, the company valued colleges that had strong enrollment or application growth.
Palladius, which manages about $950 million in real estate assets across the country, believes the portfolio will "generate favorable risk-adjusted returns," for its investors. While the world of high interest rates has made it tough for many CRE operators to play offense, the Austin, Texas-based firm was able to raise roughly $112 million through a private real estate investment fund, which recently closed. The fund will help pay for the nine assets.
“Despite constriction in capital markets activity and transaction volume that sidelined many of our peers, we were able to take advantage of early tailwinds from a trajectory flip in interest rates and leverage our team’s deep knowledge of our markets and residential asset classes to acquire properties at an attractive basis,” said Manish Shah, senior managing director at Palladius.
Before making this purchase, Palladius recently acquired four residential properties — all located in Texas. This includes The Chloe Leander (276-unit apartment community), URSA Baylor (840 student housing beds), The Chloe Kyle (mixed-use community that includes 342 units), and The Mirage (816 student housing beds).
For multifamily as a whole, strong fundamentals are expected to carry investment sales activity this year for the sector, according to Colliers’ 2025 Outlook. Fewer permits and construction are expected to lead to strong rent growth and NOI gains in 2025. Over the past year, high supply has caused headaches for many landlords. However, Colliers did warn that demand could be depressed if interest rates don't come down enough.