St. Petersburg-based apartment investor buys Indiana properties to expand portfolio and adds development-focused executive
Stoneweg US has kicked off the new year with a flurry of apartment acquisitions in Indianapolis, a market it says is still poised for further growth after five years of expansion.
The St. Petersburg-based multifamily rental company, whose portfolio is now valued in excess of $1 billion, also has made a key hire in its push to diversify into ground-up development.
Mark Rios, named to the newly created role of development manager, joins the company from Tampa-based Metropolitan Ministries, where he worked as vice president of real estate development.
“Development is definitely a strategy for growth that we’ve identified — we’re starting one project in Florida soon and have another piece of land under contract now — and Mark will be a big part of that,” says Patrick Richard, Stoneweg US’s CEO.
“He’ll be our conductor for new projects,” Richard adds. “If COVID-19 has shown us one thing, it’s that diversification is key.”
As development manager, Rios will lead due diligence work, create pro forma financial models for new communities, manage contractors and other vendors and ensure the timely completion of all projects. He’ll also be involved in budgeting and risk assessment and work closely with Stoneweg US’s asset management team.
The purchase of the three Indiana complexes — Aura, M Club and Retreat Northwest — will add 849 units to the company’s portfolio, which now tops 12,000 units.
Stoneweg completed the Indiana acquisition with the proceeds from a 1031 exchange in December. The 10-property Florida portfolio contained 1,207 units and sold for $94.25 million, generating an internal rate of return of nearly 30%.
The company entered the Indianapolis market last year, with the purchase of a complex called Harrison Point.
Richard says the company is searching out future acquisitions there, along with apartments in existing target markets such as Louisville and Dallas.
“Indianapolis has been an area that’s been on our watch list for some time,” Richard says. “It’s a market that’s done well over the past several years and it has the population growth and the job growth that we look for when making acquisitions.”
Each of the three Indianapolis properties were developed in the 1970s. Stoneweg US plans to invest a total of roughly $5.5 million into updating and modernizing the three complexes.