Customize Consent Preferences

We use cookies to help you navigate efficiently and perform certain functions. You will find detailed information about all cookies under each consent category below.

The cookies that are categorized as "Necessary" are stored on your browser as they are essential for enabling the basic functionalities of the site. ... 

Always Active

Necessary cookies are required to enable the basic features of this site, such as providing secure log-in or adjusting your consent preferences. These cookies do not store any personally identifiable data.

No cookies to display.

Functional cookies help perform certain functionalities like sharing the content of the website on social media platforms, collecting feedback, and other third-party features.

No cookies to display.

Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics such as the number of visitors, bounce rate, traffic source, etc.

No cookies to display.

Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.

No cookies to display.

Advertisement cookies are used to provide visitors with customized advertisements based on the pages you visited previously and to analyze the effectiveness of the ad campaigns.

No cookies to display.

Insights

KeyCity Capital Announces the Closing of the M6 Portfolio Acquisition in Memphis, Tennessee

https://www.keycitycapital.com/insights/keycity-capital-announces-the-closing-of-the-m6-portfolio-acquisition-in-memphis-tennessee/

The M6 Portfolio is the first asset acquired in KeyCity Capital's most recent investment offering, the KCAP RE Fund III

KeyCity Capital and Arbor Realty Trust are pleased to announce the closing of the M6 Portfolio Acquisition comprising 1,240 apartment units across six separate multi-family properties in Memphis, Tennessee. KeyCity Capital partnered its equity with Arbor Realty Trust’s senior financing to complete the $82 million purchase and the $14 million capital expenditure plan to upgrade the properties. This portfolio of properties is a mixture of B and C Class workforce housing units with the potential to become upper B Class with the business plan and market growth.

The M6 Portfolio is the first asset acquired in KeyCity Capital’s most recent investment offering, the KCAP RE Fund III. It serves as our fourth equity fund and the eighth fund managed. This acquisition is part of our strategy to reach $1 billion in Real Estate AUM in three years while building communities and creating opportunities for its investors to achieve financial independence.

Memphis falls within KeyCity Capital’s four main target market criteria: universities, major medical, strong financial market, and diversity of employers. Therefore, making the city an ideal location to invest in real estate – specifically workforce housing. Each property in the M6 Portfolio is conveniently located near major highways, local shopping, dining, and entertainment and is close to the largest employers in Memphis, including Amazon, FedEx, and St. Jude’s Research Hospital.

“The M6 Portfolio is located in the heart of workforce Memphis and more specifically centrally located to the up-and-coming area known as Germantown,” says Tie Lasater, CEO of KeyCity Capital. “The migration trend to Tennessee and, more specifically, Memphis is due to central logistics locations exploding. Amazon, St. Jude’s, and FedEx are all growing at a rapid pace and creating significant job growth, therefore, we are on the front end of huge opportunity.”

“We are pleased to partner with KeyCity Capital, an experienced investment team with a strong track record,” said Samuel Schwass, Director at Arbor Realty Trust. “The M6 Portfolio is an asset with a lot of potential situated in a strong market, and we believe that the talented KeyCity Capital team will be able to unlock that value.”

The business plan for the properties has four components – improving the operating efficiency, extending the existing Property Tax PILOT Program, implementing a crime mitigation program, and continuing the seller’s renovation program, which includes repairs and upgrades to the interior and exterior of each building.

Once renovations are complete, KeyCity Capital anticipates achieving average rent premiums of approximately $150-$250/unit per month to bring the properties in line with comparable renovated complexes in the area. Mr. Lasater adds, “The PILOT Tax Program, which locks property taxes for the next ten years at historical rates, is a huge benefit to our company and our investors. It adds a 2% increase to net cash flows, which has a significant impact on our investors in return.”

Additionally, KeyCity Capital strives to add value to communities and improve the lives of those who occupy their properties.

“This acquisition supplies housing to a growing workforce and, more importantly, creates
nearly 100 local jobs. We are changing cities as we build, manage, secure, and connect
communities to the very people who make the community.” – Tie Lasater, CEO of KeyCity Capital

INSIGHTS

Multimedia

The Future of Homeownership: Tie Lasater Talks Interest Rates, Apartment Vacancies| Hugh Hewitt Show

August 27, 2024

In this insightful interview, Tie Lasater, CEO of KeyCity Capital, joins Hugh Hewitt on The Hugh Hewitt Show to discuss critical issues affecting the housing market, including rising interest rates, apartment vacancies, and the changing...

Multimedia

Investing in the Sun Belt: Stephen Patterson Talks Tax Advantages & Diversification with Hugh Hewitt

August 16, 2024

In this enlightening conversation, Stephen Patterson, Chief Client Officer of KeyCity Capital, joins Hugh Hewitt on The Hugh Hewitt Show to discuss how investing in rental properties in the Sun Belt can provide lucrative opportunities...

Blog Posts

Is Higher for Longer Almost Over?

August 15, 2024

It’s been almost a year since the last increase in interest rate by the Fed. Inflation was moving at an unsustainable pace and the labor market was red hot. By all standards, the economy was...