Jerry L. Hess, acquisitions manager for Bascom Group's Dallasteam, says location and upside prompted the deal with DeerfieldTownhomes LP of San Antonio. The 10-year-old complex at 1947Larkspur Dr. is positioned on nine acres in the far northsubmarket, where comparable properties are trading for $60,000 to$65,000 per door. The equity partner is Austin-based Cross AtlanticInvestors LLC, the US investment arm of Deutsche Structured FinanceGmbH in Germany.

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"There is very little well-located townhouse product in themarket, which was one of the things that initially attracted us toLegacy," Hess says. "When we dug into it, we saw that rental ratesdid not reflect the value of the attached garages, washer-dryerconnections and very large average unit size, which reallydifferentiated it from comps in the market."

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The 96%-leased complex has one-, two- and three-bedroomapartments ranging from 732 sf to 1,224 sf. Rents are between $665and $1,040 per month. Hess says renovations will begin in March andbe completed within 24 months.

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Hess tells GlobeSt.com that the complex has been underwrittenfor a three-year hold. "If we can execute our business plan morequickly, we'll consider a sooner exit," he says.

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Hess says Bascom likes the San Antonio market although there areno further deals in the pipeline. "We're looking for quality,value-add investment opportunities, which can help us takeadvantage of the rental rate growth and strong occupancies in themarket," he says. "The best assets for the Bascom portfolio arethose with good value-add potential."

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Ryan Epstein with Marcus & Millichap Real Estate InvestmentServices' San Antonio office brokered the transaction. HollidayFenoglio Fowler LP's Dallas team of senior managing director JohnBrownlee and associate director Travis Anderson arranged financingthrough Christopher Holden, principal with Prudential MortgageCapital Co. in San Francisco. Dustin Williamson with Cross AtlanticInvestors handled the equity requirements.

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