In June, 2023, Cottonwood Group, a Los Angeles-based REPE fund, announced the acquisition of Taylor Commons, a 224 unit multifamily asset located at 5600 Cotswold Hills Drive in Fort Worth, Texas. This will be the sixth deal in which Cottonwood partners with Texsun Holdings, an appropriately named Dallas-based REPE fund specializing in the acquisition and management of Class B and C assets with both core-plus and value-add strategies.
In line with Texsun's expertise, plans call for a "comprehensive renovation" of the 172,000 SF property. While details on the purchase price and renovations have not been disclosed, Fort Worth's white-hot market points to a shift up-market to capitalize on the opportunity for rent growth.
Mark Green, Chief Investment Officer at Cottonwood, spoke to the opportunity provided by both the asset and partnership:
We are excited to acquire Taylor Commons and expand our partnership with Texsun. North Texas is a dynamic market with strong population growth, and Taylor Commons is another well-positioned asset in a prime location.
Fort Worth's market has been especially noteworthy as of late, with over $2.3bn of new supply across all asset classes in the pipeline. Value-add opportunities such as Taylor Commons can bypass much of the red tape and competition for contractors, saving time and money for investors. Sean Fogelman, Managing Partner and Co-Founder of Texsun, spoke to the value of value-add:
This transaction, especially at a time when dealmaking is more difficult and complex than ever, uniquely positions our firms as key players identifying and maximizing investment opportunities in strategic growth communities like Fort Worth.
Fort Worth is certainly a "strategic growth community" that may offer opportunities previously overlooked. Especially in a time when credit is tight and risk appetites are low, there is much value to be realized by repositioning assets via renovations to realize the potential of an area. Investors such as Texsun, whose hold period is 3-7 years, can then monetize their improvements relatively quickly by selling the stabilized, improved property to a long term asset manager.