AvalonBay Picks Up $620M in Texas Multifamily

28 February 2025

Virginia-based REIT AvalonBay Communities is set to double its stake in Texas multifamily with a nearly $620 million deal.

AvalonBay is under contract with Little Rock-based BSR Real Estate Investment Trust to buy two apartment communities in Austin and six in the Dallas-Fort Worth area, according to a news release reported by Bisnow. Average rent across the portfolio is $1,675 per month. The deal works out to about $230,000 per unit.

The REIT, led by CEO Benjamin Schall, will pay $187 million in cash for 554-unit Cielo Apartments near Bee Cave built in 2015, and the Retreat at Wolf Ranch, a 303-unit property built in 2017 in Georgetown. It’s expected to close around the end of March.

Little Rock, Arkansas-based BSR bought Cielo as two adjacent apartment complexes in 2019 for $104.5 million, Cielo and Madrone. AvalonBay plans to develop and report them as one 554-home complex.

The DFW properties include: the 216-unit Auberry at Twin Creeks in Allen, the 276-unit Lakeway Castle Hills in Lewisville, the 330-unit Satori and 349-unit Vale in Frisco, the 301-unit Aura in Benbrook and the 372-unit Wimberly Apartments in Dallas. AvalonBay will pay $431.5 million for those properties, including $193 million in cash. The rest — $238.5 million — will be paid in DownREIT units, or interests in a new subsidiary, AVB DownREIT. Part of the cash payment will pay off BSR’s debts.

DownREIT units are valued at $225 each. Only accredited domestic investors holding Class B Units of BSR Trust can receive these DownREIT units. After one year, DownREIT unit holders can either cash them out based on AvalonBay’s stock price or exchange them for common stock.

The Wimberly Apartments is the oldest, built in 1995, while the newest, Vale Frisco, was built in 2021. The average age of all eight complexes is 11 years.

The purchase comes at an opportune time for the multifamily market in DFW which is expected to rebound this year and next after absorbing a historic amount of supply delivered in 2023 and 2024.

— Andrew Terrell