Toro Real Estate Partners has made its first acquisition in a qualified opportunity zone.
The property is located in Columbus, Ohio, and consists of 121 apartment units that are completely vacant and have significant deferred maintenance attached to it. With the addition of the 121 units, that brings Toro to roughly 2,500 units in total acquired, with an additional 832 units currently under contract.
“We have been closely following the developing possibilities that surround opportunity zones and have been eager, and yet patient, to find the perfect first deal for us to undertake,” said John Cohen, one of Toro’s co-founders.“We feel that there is going to be an incredible opportunity in this space over the next three to four years, and we are incredibly happy that we were able to secure this deal before the end of the 2018 calendar year.”
Toro feels extremely comfortable with this asset because its total capitalization is well below replacement cost and an identical building sold for a significant premium within the last six months.
“We’ve really stress tested this deal because of the newness of the rules and regulations surrounding the opportunity zones,” said Don DiRenzo, Toro’s other co-founder. “We wanted to be ultra-comfortable with this deal should we be at a point in the cycle where things might start to go in a different direction. We feel that we can spend quality capital to reposition this asset, and it is going to be an incredible vehicle to hold for 10+ years and take full advantage of all the benefits opportunity zones have to offer our investors.”
Cohen added, “We are continuing to explore other opportunities that can capitalize on the benefits that opportunity zones have to offer and are looking to have a comprehensive plan in place for first quarter 2019. With the ability to develop new properties or re-develop/overhaul existing properties, but with a longer-term horizon, we feel it fits in better with our company’s priorities and return expectations, rather than the typical short-term timeframes expected with these types of deals.”
Toro was able to acquire this property completely off-market. The property represents Toro’s 14th purchase since 2015.
Toro Real Estate Partners is a private real estate investment firm focused on buying apartment communities throughout the Southeast and Midwest.
