Interwest acquires the 180-unit
Savoy Apartments, with plans to
convert into student housing.

HOUSTON-A few years after initially examining the 180-unit 5500 Sampson the Medical Center area, Interwest Capital Corp. acquired the 11-year-old, class A multifamily property from Internacional Realty of San Antonio through an off-market transaction. The San Diego buyer will soon take steps to convert the market-rate asset into student housing to serve University of Houston and Texas Southern University.

“This was originally built as traditional multifamily housing in 2001, and about a year or so ago, TSU master-leased a portion of the property,” explains Interwest President Karl P. Coleman. “Now our plan is to convert it entirely to student housing.” Renovations at Savoy Apartments, located at 5500 Sampson St., will include a new clubhouse, a study room and game room. Furthermore, American Campus Living, the property management arm of Austin, TX-based American Campus Communities, will handle leasing and property management.

Coleman tells that Savoy caught his eye a couple of years ago as a potential investment opportunity, but as a traditional multifamily property. “We felt like, while it was an interesting possibility at the time, it wasn’t quite there in terms of what the sellers wanted and what we were willing to pay,” he explains. But during the past couple of years, the need for additional student housing, particularly housing serving TSU, has increased.

Furthermore, Interwest Capital has become more involved with multifamily assets serving college campuses and has become more comfortable with the property type. Earlier this year, the company acquired the 300-unit Camino Del Sol apartments, which serves the University of North Texas in Denton, TX. And in June, Interwest teamed with Angelo, Gordon & Co. to acquire the 660-unit Haven, which is home to many students attending Arizona State University. Even so, Savoy will mark Interwest’s first full-blown student housing project. “We’ve gotten more comfortable with that market,” Coleman says.

Interwest has more properties under contract, one of which is in Arizona and another in Florida, that Coleman hopes will close by the end of 2012. “We plan to buy more during the first quarter of next year,” he adds.