Bank, management company team up to buy Southeast apartment communities
By Michael Tomberlin – The Birmingham News
Birmingham investment bank and an apartment management company have joined forces to buy large apartment communities throughout the Southeast.
Founders Investment Banking and Dobbins Group have created a firm called Dobbins Founders Investments LLC. Its mission: Acquire apartment communities with at least 200 units, often through distressed sales. Birmingham-based Dobbins Group would then manage and operate those apartment communities.
Andy Sink, managing director of Founders Investment Banking and head of its real estate investment practice, said his firm sees investment opportunities in apartment communities as the economy and the real estate market begin to rebound. He aims to steer some Founders clients into those investments, but he also wanted to team with a partner who knows the ins and outs of apartments.
“When we went through this process of changing our real estate practice into an investment practice, we identified the multifamily sector as one we were really interested in,” Sink said. “But we also realized we needed some real expertise in executing on that. We’re good at the access to capital side of things but not necessarily at handling transactions on the multifamily side.”
Enter Bill Dobbins. He knows the transaction side, having handled major apartment deals at Birmingham-based Arlington Properties for a decade before forming his own apartment management firm this year.
“I spent the past the last 10 years working on deals in an environment where access to capital wasn’t that much of a problem,” Dobbins said. “With Founders, I have the ability to outsource the capital raise and I go out and find the deals and then manage and operate the properties.”
Sink said the timing was right for both parties.
“We were searching for someone with the expertise that Bill has and he was in the process of venturing out on his own, so it was a great fit,” Sink said.
Dobbins said the obvious place to look for potential property acquisitions in the near-term will be those in foreclosure or in distress because of the real estate slump and tight lending practices. However, the new venture will also look for properties that have growth potential or are identified as a good value.
“Over the next couple of years we hope to build a sizable portfolio of multifamily properties,” Dobbins said.
Sink said the pairing of manager/operator and capital investor is the kind of model needed in the current climate.
“Before, you could operate these two pieces of the transaction separately because capital was so easy to get for a developer or purchaser,” he said. “Now, with the way the market has changed you really have to have both pieces together to make deals happen at the speed they need to.”
Dobbins said he will search for apartment properties throughout the Southeast and has already identified some he is pursuing.
The new venture will be located in Founders Investment Banking’s offices at Lakeshore Park Plaza in Homewood.
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