BALCH SPRINGS, TX-With a 1031 exchange clock ticking, a private investor from Corvallis, OR has gotten in under the wire with the $22.5-million acquisition of the 296-unit Stoneleigh on Cartwright. A 10-year loan, with a low 6% fixed-rate interest, is underwriting the replacement play.

"We satisfied the exchange on the last day," Jason Cooney, managing director for Scottsdale, AZ-based Axxiom Commercial Capital, tells GlobeSt.com. The loan originator says the 80% loan-to-value financing put a now 93%-leased complex on 30.3 acres at 500 W. Cartwright Rd. into the hands of Dr. M.T. Aliniazee, who was deploying gain from the sale of the Las Vistas at Papago Park at 1010 N. 48th St. in Phoenix into his first Texas deed.

The Uniondale, NY-based Arbor Commercial Mortgage LLC funded the deal with a Fannie Mae loan. The biggest hurdle was "the implosion of the capital markets," Cooney says. "We were doing a high-leverage transaction in a volatile credit market with almost a break-even debt coverage."

Dallas-based developer Seneca Investments Inc., led by Warner Stone, developed the Stoneleigh on Cartwright in 2003 in its usual merchant build fashion. The complex is the newest of just a few class A multifamily developments in the Mesquite-Balch Springs submarket. The Hendricks & Partners' Dallas team of Tom Burns and Jay Gunn were marketing it for $25 million, free and clear.

"It had just reached stabilized occupancy. We were still burning off initial lease-up concessions," Gunn says about the contract's timing. "There is definite upside. The property's performance has increased monthly since the new owner put it under contract."

Gunn says occupancy hovered 90% at the onset of the three-month marketing, rising as the deal pushed toward the closing table. "They are positioned now with occupancy to start pushing rents and reduce concessions," he explains. Woodmark Real Estate Services Inc., with headquarters in Dallas and Washington, DC, will lease and manage the asset, which gets to keep the Stoneleigh brand.

The 21-building complex, with a mix of garages and carports, has one-, two- and three-bedroom units ranging from 615 sf to 1,234 sf for an 862-sf average. Monthly rents go from $680 to $1,200, with the average at $889.

Gunn says he and Burns were working with Stoneleigh's buyer for several months. "He had several opportunities and this is the one that he honed in on," Gunn says, adding it's a one-off play by a private investor who plans to hold it for the long term.