HOUSTON-Following a somewhat prolonged marketing period, the 54-unit Carlton House has been purchased by a private investor in California as part of a 1031 exchange. The property, located at 4115 S. Braeswood, was sold by Houston-Carlton House Inc., an entity of a family based in Caracas, Venezuela, which had inherited the property and had owned it for more than two decades.

"It was underperforming on the rent and overperforming on expenses," notes Kevin McCarthy, senior advisor with Hendricks & Partners' Houston office. "The people who sold it had inherited it, but it needed fresh blood." Additionally, he adds, a fire on the property helped extend the marketing period, as well as lowering the ask from its original $2.4 million to $2.15 million.

McCarthy and Hendricks partner Ed Cummins III represented both the seller and the buyer, Irvine, CA-based Lily Properties, LLC in the transaction. McCarthy tells GlobeSt.com that the property sold just south of the list price, and that the buyers plan to invest approximately $150,000 to $200,000 to upgrade the units. The investors plan to keep the current management staff in place.

"We had numerous offers on this, but the buyers were aggressive on the pricing," he goes on to say. "This was a one-shot deal for them; they'd just sold an eight-unit property, and this represented a pretty decent-size step up for them."

Situated on 1.5 acres and built in 1962, the property, which had one vacant unit at the time of sale, features three efficiency apartments at 400 sf to 420 sf, and offered at a monthly rental of $425 to $595. The property also includes 32 one-bedroom units, between 530 sf to 850 sf at a monthly rental of $485 to $710; 15 two-bedroom units, between 1,140 sf to 1,147 sf at a monthly rental of $895 to $937; and four three-bedroom units, at 1,523 sf, and offered at a monthly rental of $1,040.