The complex at 1700 Bob Smith Rd. was sold by a Houston-area partnership, Bay Oaks Apartments Inc. and HSR Enterprises LLP, both from Friendswood. The holding was on the market just a few weeks before it went under contract, Jeff Eisenhardt of the Houston office of Phoenix-based Hendricks & Partners tells GlobeSt.com. He says a couple offers came in during the marketing period, but several more surfaced after the asset, with a $3-million asking price, was optioned.

The buyer assumed a conduit loan of nearly $2.2 million with Atlanta-based Column Financial in order to close the deal, Eisenhardt says. He adds that the quick sale was done so the sellers could deploy the capital into another investment.

The property was 95% occupied at the time of the sale. Eisenhardt says the submarket average hovers at 89%.

The average unit totals 830 sf, with rent averaging $507 per month or 61 cents per sf. Eisenhardt says the sellers started a program to realize upside potential in the property right before the sale. He says minor rehab projects allowed the owners to jump up the rent a couple of cents per sf. The new owner will get to collect on that upside plan because there are still some leases at the old price. As those contracts expire, the new rate will kick in, Eisenhardt says.

Prior to the sale, the Friendswood partnership started installation of water meters in each unit. Eisenhardt says the conversion will likely be finished by the end of the year and result in a substantial increase in the new owner's take-home pay.