HOUSTON-Lynd Residential Properties’ (LRP) acquisition of the 438-unit Limestone was more than a first buy of the year. The closing has set the San Antonio multifamily property developer, manager and owner on the path toward a hoped-for goal of $1 billion in acquisitions and developments in 2013.
A. David Lynd, president and COO of LYND, says that the company’s geographic location ranges from Florida to Arizona. “We reached our production goals in 2012; we were active in buying,” Lynd tells GlobeSt.com.
LRP, LYND’s multifamily property investment arm, will look for value-add opportunities similar to those offered by Limestone, the 1999-built asset that had fallen into foreclosure in 2000 and was acquired by Post Investment Group in 2009. “That property had taken a beating, with a drop in occupancy,” Lynd notes. “We felt we were buying a vintage asset for a price that was ideal from a value-add standpoint.” For LRP, adding value to the property will involve putting washers and dryers in the units, sprucing up the interiors and pushing rents. Though current occupancy is 94%, Lynd says the goal is to attract a better class of tenant to the location.
Even better from Lynd’s standpoint was the financing, which was inexpensive. “We got more yield out of it,” he says, with a laugh. “It was almost like buying the financing, and finding an apartment complex on it.”
Though LRP made it to the closing table with Limestone, Lynd acknowledges that it’s a tough market to find value-add properties. This is especially the case in Houston which, as has been blasted all over the media, is a red-hot market from a commercial real estate investment standpoint.
But Lynd puts it all into perspective, pointing out that the Houston metro region is huge and painting it with a macro brush would be a big mistake. “We have to be careful about location,” he explains. “You can’t make a macro bet in Houston and always win. Some areas are challenging when it comes to demographics; you can’t get the rents. If you make a wrong bet in a wrong area, then rent growth won’t work.”