CORPUS CHRISTI, TX-Secondary markets in Texas are becoming positive targets for multifamily property investors, which was recently proved by the closing of two different properties in separate transactions. Trading owners were the locally based, 169-unit Bay Vista complex, and the 128-unit Avenue, in Nederland TX.
According to the brokers at Cushman & Wakefield of Texas, Inc. Bay Vista Apartments I LP was the seller of Bay Vista Apartments at 522 Hancock Ave., which traded at a price range between $16 million and $18 million. The buyer was Sage Properties Corp., and the trade was brokered by Ed Nwokedi, Walter Montague
Meanwhile, further east, the Avenue at 2900 Nederland Ave. sold for between $10 million and $11 million to Avenue Apartment Investors LLC, with Nederland Avenue Apartments Ltd. being the seller. Nwokedi and Montague were also involved in this transaction, as was Jacob Saour.
Both assets were stable from a leasing standpoint and are of class A quality, having been constructed within the last five years. Both assets also received a great deal of interest from out-of-state players.
Saour tells GlobeSt.com that the investment driver for both of the assets was the HUD assumable loans on them. “You have 40-year term on interest that’s sub 4.5% and with a 40 year amortization, going at cap rates that are hard to beat,” he points out.
Nwokedi agrees, and also tells GlobeSt.com that private buyers attempting to go where institutions aren’t looking are eyeing the secondary and tertiary markets in a more favorable fashion. “They can get a pretty good yield for those markets,” he comments, adding that his team will soon be bringing to market the 218-unit Arden Ridge in Amarillo. Much like the properties that just sold in Corpus Christi and Nederland, Arden Ridge is a class A multifamily property built between 2008-2011. “It’s getting good rents and is stabilized,” Nwokedi says. “We’re likely to get a lot of interest on that as well.”