HOUSTON—Northbrook, Ill.-based Prime Property Investors has completed the acquisition of a 306-unit apartment community in the Houston suburb of Stafford within Fort Bend County, one of the fastest-growing counties in the nation, according to the U.S. Census Bureau. This will be the second Houston-area property that PPI owns, marking the company’s continued expansion into the Houston multifamily real estate market.
Located on Fountain Lake Drive, just east of South Dairy Ashford Road, Estates at Fountain Lake (formerly known as Alexan Fountain Lake) is a 13.6-acre full-amenity luxury community that consists of 14 three-story garden-style buildings with a total of 306 units. PPI acquired the property from Dallas-based Trammell Crow Residential.
Barbara J. Gaffen, co-CEO of PPI, tells GlobeSt.com, “This property makes sense for us. Houston is the fastest-growing city and fourth largest in the country, with a half-million more people expected over the next five years. We have a huge export market, expanding tech hubs, and more and more companies are either relocating to Houston or opening additional offices here. So we are seeing tremendous job growth.”
Gaffen explains that over the past several years, the company has been looking to diversify its real estate portfolio and thinks the Houston market is among the most vibrant multifamily real estate markets in the country.
This is not the first time PPI has worked with TCR. Last fall, PPI entered into a joint venture with TCR to develop a new-construction luxury garden-style apartment community in Houston called Alexan Auburn Lakes, which is scheduled to welcome its first move-ins this August. Due to its successful partnership with TCR on Alexan Auburn Lakes, PPI was a natural choice in acquiring Alexan Fountain Lake, noted Gaffen.
“We’ve had a great experience working with TCR on Alexan Auburn Lakes and wanted to continue to build on that relationship,” says Gaffen. “When the opportunity to acquire one of TCR’s highly sought-after properties became available, we moved quickly. TCR’s familiarity with PPI’s solid business background, combined with our proven track record of working well together, ended up being a win-win for everyone.”
PPI has rebranded the community Estates at Fountain Lake and over the next two years plans to execute a “value-add” strategy to further enhance the property to meet the increasing demand for upgraded, luxury apartments in the area.
“Estates at Fountain Lake was built in 1998 and is an exceptionally well-constructed and maintained property that we think has great potential for expanding our portfolio and strengthening our position in the Houston market,” says Gaffen. “Fort Bend County, where Estates at Fountain Lake is located, leads the Houston region in job creation and its apartment submarket is 96 percent occupied with rental rates growing 12 percent over the last six months.”
Estates at Fountain Lake consists of 198 one-bedroom, one-bath apartments and 108 two-bedroom, two-bath units. It is currently 100 percent pre-leased. Average rents are around $1,300 per month.
All units have private balconies or patios and feature nine-foot ceilings with double crown molding. The community also includes 391 recently repaved surface parking spaces, 36 covered spaces and 69 enclosed private parking garages.
“Renovations will be done in phases as leases come up for renewal, with a goal to complete 10 new unit renovations per month over the course of two years,” says Gaffen. “Common areas like the clubhouse and pool will also be upgraded.”
Renovations to the common areas at Estates at Fountain Lake will include enhancing the pool area with a new sun deck, cabanas and outdoor grilling area; adding a “bark park” to accommodate residents with pets; upgrading the fitness center; redecorating and renovating the management office and clubhouse; and enriching the community’s landscaping and signage.
Unit updates will consist of new stainless steel appliances, fabricated wood flooring throughout the main living area and kitchen, granite countertops and new cabinets in the kitchen and baths, custom designer paint colors and additional crown molding. PPI also plans to add fenced-in, private yards to select first-floor apartments.
ARA Capital Markets represented TCR in the sale. Specifically, Matthew Rotan, David Oelfke, David Wylie and David Mitchell from ARA Capital Markets handled the sale of Estates at Fountain Lake and Adam Allen of ARA Capital Markets assisted with the capitalization of the property.