(Read more on the multifamily market.)

|

DALLAS-A Concierge Asset Management LLC-affiliated partnershiphas jumped into a value-add play in East Dallas, acquiring the656-unit Honey Creek Apartments for slightly less than its$19.5-million assessment. The acquisition is tag teamed with thefirm's decision to open a local office.

|

Concierge Asset Management is and will continue to beheadquartered in Tiburon, CA and Houston so the second Texaslocation is a strong show of confidence in the marketplace andsolidified by its decision to buy the 22.4-acre Honey CreekApartments at 11611 Ferguson Rd., according to CEO Ted Kerr. "Weare very bullish on the combined metropolitan area of Dallas/FortWorth," he says, "and we believe Honey Creek's submarket is wellpositioned for economic growth."

|

Built in 1984, Honey Creek was 90% leased at sale time. The37-building mix of one- and two-bedroom apartments in several floorplans, ranging from 518 sf to 953 sf, is situated at theintersection of Interstate 635 and Ferguson Road.

|

Kerr says the value-add play calls for a renovation to raise thecomplex up a notch to class B-plus standards and seed a rent hikefor the expected three- to five-year hold. Existing rents go from$449 to $636 per month. He says the post-renovation goal is 5%annual rent growth.

|

According to Dallas County tax records, the seller is a limitedpartnership with ties to Tampa-based MuniMae Portfolio ServicesLLC. Kerr says the free-and-clear sale was closed with a five-yearloan from Freddie Mac at a 5.6% fixed-rate interest, which wasarranged by Charlie Geiss, Concierge's director of equity andinvestment finance.

|

According to Kerr, the Concierge team repeatedly asked MuniMaeabout the asset, which hit the market about one year ago. "Theseller knew we were serious about the property. We had demonstrateda strong interest in buying this particular property," he explains."And, we had a reputation for being a reliable buyer and had doneour homework."

|

Kerr says there was a requirement for a year-end closing, whichworked in Concierge's favor with its track record as the linchpinfor the MuniMae recommendation. The seller's broker, Paul Harris,managing partner in Dallas for Chicago-based Moran & Co., saysin a press release that Concierge wasn't the highest offer, but "weknew their reputation and based on our recommendation, they wereselected as the buyer." Jenny Gillaspy, a Concierge director ofacquisitions in Dallas, led negotiations, with COO Myra Rega incharge of due diligence.

|

Concierge's Dallas office has opened on the fourth floor of 9400Central Expressway. Michael Wurst, general counsel and director ofcapital market investments, heads up the four-member office. Morepersonnel and more acquisitions will be added as the year playsout. The investment group owns two other multifamily properties inDallas/Fort Worth.

|

Kerr says Concierge is armed with $400 million of debt andequity to deploy this year for its strategy to build a workforceand affordable housing portfolio. "There is no specific goal forDallas, but we are looking for good opportunities," he says. "Weare very interested in some properties and are negotiating topurchase them, but they're not under contract."

Want to continue reading?
Become a Free ALM Digital Reader.

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.