Barker Pacific, Pacific Real Estate Form JV To Acquire Value-Add Apartments

Locally based Barker Pacific Group (BPG) and Pacific Real Estate Partners (PREP) have formed JV Sterling Real Estate Holdings to invest in value-add multifamily communities in Arizona, Nevada and Texas. We caught up with Barker Pacific CEO and Sterling principal Michael Barker (who loves to cook and was snapped here helping the chef at a restaurant in France) to learn more about the new JV’s plans.

“We’re not interested in buying Class-A properties,” he tells us. “Our objective is to acquire well-managed apartment properties in need of renovation, using our collective talents and capital to rehab them.”

He noted the JV brings together a winning combination of skill sets. Michael says Phoenix-based PREP co-founder and Sterling principal David Zeff has extensive experience redeveloping Class-B and C apartment properties, while Barker Pacific brings a strong institutional following and a deep match of people who can do the back-office work.

Here's David with his wife on a hike in the Arizona mountains.

The new JV is searching for investment opportunities in the $5M to $35M range in Austin, Phoenix, San Antonio and Reno, NV, with a focus on lightly marketed and off-market deal opportunities and low-cost basis to minimize risk.

The current projects of interest rent between $500 to $600 per month, where rents could be raised over time once improvements are made and still be considered affordable, Michael explains. He notes that if $10M is paid to acquire a property, Sterling would invest $2.5M to $3M in upgrades. He says that initially, BPG and PREP will pool their capital to fund Sterling projects, but they may eventually team up with other partners.