UDR Lassos Five Texas Rental Communities for $401.9M

UDR has gone big in Texas. It acquired five properties totaling 1,753 units in the Dallas and Austin metros for $401.9 million. They include:

• The Flats at Palisades in Richardson.
• Central Square at Frisco in Frisco.
• Estancia Villas in Austin.
• Villaggio in Mansfield.
• Palo Verde in Austin.

Multifamily Dive reports the publicly traded REIT said during its second quarter earnings news release, that UDR funded the purchase with $172.5 million of its operating partnership units, which are equivalent to REIT shares, issued at $47.50 per unit; $20 million in cash; and the assumption of $209.4 million of below-market debt at an average coupon rate of 3.8% with an average of 6.3 years to maturity.

“When you look at that [interest rate] relative to the market today in the low 5’s, we’ve got six-plus years of 150-basis-point advantage on that debt, which if you think about a debt for market value it translates into about a 25 basis point benefit in terms of asset pricing,” Said UDR’s Joe Fisher.