AUSTIN-Developer Hammond Jones Real Estate has disposed of the 650-bed Midtown portfolio consisting of Midtown Arlington (which serves the University of Texas at Arlington) and Midtown Denton (near the University of North Texas). Following a low-key marketing period, the local seller selected Sausalito, CA-based Shore to Shore Properties as the buyer.
According to Chris Epp with Apartment Realty Advisors’ National Student Housing team, the seller opted for a limited marketing effort, rather than a full-scale national blast. “They don’t want to be known solely as merchant builders who build then sell,” comments Epp who with ARA colleagues Chris Bancroft, Meredith Wolff and Bart Wickard, represented the seller. “They’re opportunistic sellers; when it makes sense to sell, they come to groups like us and ask if we can talk to the top three or four potential buyers to see if they’re interested.”
Epp tells GlobeSt.com that a such a strategy makes sense especially as buyers prefer potential deals that have fewer others involved. “The bidder pool was a mix of private, high-net-worth individuals, syndication groups and REITs,” Epp goes on to say.
Though Shore to Shore is known for buying and owning conventional multifamily housing, it also has a strong record with student housing acquisitions and management. In 2012, the company acquired Sterling Northgate, which serves Louisiana State University in Baton Rouge and Fort Worth-based Edge 55, near Texas Christian University. “He’s staying with conventional housing, but is making a push in the student housing world,” Epp explains. “This is a prime example of a buyer who is coming to student space for a higher-than-market yield than what’s available in conventional multifamily offerings. Dallas (multifamily) caps are up to 100 basis points lower than student housing.”
Epp says Shore to Shore ultimately ended up the winner because of its growing success in student housing. “Ultimately Pat (Wabl, Shore to Shore’s president) was able to get this deal done and was able to transact the deal,” Epp says. “He’s shown us a couple of times, now, that he can successfully close.” Shore to Shore will manage the assets in house.
The portfolio consists of:
- Midtown Denton at 905 Cleveland St. in Denton, TX. Built in 2012, the asset consists of 120 units.
- Midtown Arlington at 1121 UTA Blvd. in Arlington, TX. The 66-unit complex was built in 2011.
Both complexes are within walking distance of campus and have occupancies in the high-90s.