(Read more on the multifamily market.)

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DALLAS-Lowering the curtain on a 12-year investment, Henry S.Miller Cos. Inc. has sold the 127-unit Deep Ellum Lofts to WestdaleAsset Management Inc. Based on average sales of higher-end class Bproperties, the three-building historic complex most likely drew atleast $13 million due to its renovation, in-town location, highoccupancy and prominence in the market.

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The sale culminates years of renovation, partnership disputesand stabilization efforts for the project, which traded at 93% to95% occupancy despite the uphill battle, according to Greg Miller,senior vice president and general counsel of the Dallas-based firm.The off-market deal, sealed in the last weeks of 2007, consisted ofthe 61-unit Continental Gin Building at 3311 Elm St., 37-unit Farm& Ranch Building at 3300 Main St. and 29-unit Murray Buildingat 3401 Commerce St.

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Miller tells GlobeSt.com that the Henry S. Miller affiliatetried to sell the asset last year, but it hit a roadblock becauseit had lost part of its parking area due to Dallas-Area RapidTransit's line expansion. Westdale owns the adjacent building andseveral others in Deep Ellum so "they have the unique ability tosolve the parking issues because of their resources," he explains."They were uniquely suited to buy this deal."

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Despite the parking scenario, Miller says the asset's urbanappeal kept occupancy above the norm after the affiliate took overas general partner in mid-2004. Since then, rents were moved tomarket rate after buying back a $3-million second lien from thecity for 60% of the note's value, according to the seller'stimeline for the investment, both good and bad years.

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"We were able to get out from under the affordable housing, moverents and stabilize the asset," Miller stresses. "The cash flow wasvery strong, but we were just ready to sell and we had a strongoffer from a party able to solve the parking issue."

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The one- and two-bedroom lofts range from 250 sf to 1,900 sf,with the average weighing in at 1,006 sf. At sale time, rents hadpushed above $1.14 per sf. Deep Ellum Lofts' include 6,000 sf ofpartially leased, street-level retail space.

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Miller says the buildings, built in 1919 on roughly four acres,were pigeon-infested and abandoned when they were acquired.According to the timeline, the original partners had $10 million ofdebt and equity resting on the plan before they started a massiveadaptive reuse that subsequently passed muster for inclusion onstate and federal historic registers.

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"It was a good deal for our investors," Miller concludes. "Themoral of the story is you never give up. But for a period of timethere, the property was struggling."

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