LaSalle Income & Growth Fund VII, a U.S. value-add fund managed by LaSalle Investment Management, has acquired Lakeshore Pearl, a 230-unit garden-style multifamily asset located in the East Riverside submarket of Austin, Texas, through a joint venture with Cypress Real Estate Advisors.
The sales price was approximately $50.5 million.
The joint venture plans to demolish 31 existing units and then develop an additional 226 additional units atop the existing surface parking lot to add significant density to the project.
Built in 2013, Lakeshore Pearl is located in the East Riverside Corridor, a city-planned redevelopment initiative aimed at transforming the south lakefront into a more urban, pedestrian-friendly environment. The asset has the potential for significant upside as Oracle, one of the area’s top employers, nears completion of Phase 1 of what will be a 1 million-square-foot cloud computing campus on the parcels that surround Lakeshore Pearl, which is expected to house up to 5,000 employees. Lakeshore Pearl is situated less than three miles from Austin’s Central Business District, the area’s largest employment hub. Residents are also drawn to this high-growth corridor due to its proximity to major transportation thoroughfares.
The Austin MSA is a fast-growing region with a population of 2 million residents, and showed growth of 37.3 percent from 2000–2010 and 16.5 percent from 2010–present. The significant population increase translates to roughly 157 new residents per day. The city’s population is projected to grow at 2.62 percent a year through 2021. In addition, since 2005, the Austin employment base has increased by more than 35 percent, which is the highest among all U.S. MSAs during that timeframe. The impressive job growth can be largely attributed to the low cost of doing business in Austin, which is one of the most business friendly environments in the nation. The southeast central apartment market caters well to the millennial demographic, employing more than 86,000 individuals, and offers several hundred restaurant and shopping options.
LaSalle Income & Growth Fund VII launched in 2015 with a $750 million target. The fund seeks to acquire under-managed, under-capitalized or mispriced assets to be repositioned as core assets. Property-level investment strategies include lease up, renovation/repositioning and ground-up development.
Other assets the fund acquired includes Lakeshore Pearl, a 230-unit garden-style multifamily asset located in the East Riverside submarket of Austin; Restoration Hardware’s Gallery at the Estate in Buckhead, a submarket of Atlanta; a majority equity interest in 399 Washington Street, a 77,000-square-foot mixed-use property that spans six stories, in the vibrant Downtown Crossing submarket of Boston’s CBD; an interest in the 450,000-square-foot office building 10 Post Office Square in Boston’s CBD; and the 541,000-square-foot office tower 123 North Wacker Drive in Chicago’s West Loop
Recently, Joe Monuz was appointed the new chief investment officer of LaSalle Investment Management's flagship U.S. value-added funds, LaSalle Income & Growth Funds, replacing Jim Hutchinson. LaSalle’s Income & Growth Fund Series was launched in 1996.
