M. Todd Marix, senior vice president with CB Richard Ellis' Houston office says JAW Equity Management LLC beat out close to a dozen competing offers because the local company came in with a large portion of non-refundable earnest money. Marix, who represented seller Whittaker Lauderdale Group of La Quinta, CA adds that the buyer obtained financing from Capmark Financial Group Inc. to complete the transaction.

[IMGCAP(2)]A specific price for the transaction was kept under wraps. Area sources note, however, that similar class C assets that are approximately 30 years old trade for approximately $22,000 to $25,000 per door.

"These are difficult properties on which to get financing right now," Marix comments. "In this environment, there is so much demand for Fannie Mae and Freddie Mac financing, those lenders can afford to be selective, and they're passing over a lot of the C stuff to finance the A and B stuff."

Another reason why JAW Equity was an appealing buyer was experience. Last summer, the company acquired a 1,486-unit Houston-area portfolio. Emery Jakab, president of JAW Equity, says the assets in that collection were distressed and carried a high vacancy when first bought. These days, the portfolio boasts a 97% occupancy.

"That's our M.O. We look for assets that have a great location, but maybe are under-managed. We buy them at an attractive price, then go in with a large renovation budget and seek to make them the best in the neighborhood," Jakab says.

Jakab tells GlobeSt.com that JAW's plans for the just-bought, 75%-occupied Whittaker Lauderdale portfolio will include new business and fitness centers, DVD libraries and general upgrades including new roofs where necessary. "All five of these properties are in submarkets where neighboring properties have occupancies in the 95% to 97% range," Jakab says, adding he expects renovation will take approximately four months. Some of the complexes have already been renamed, though the closing just took place.

Jakab says that while JAW Equity likes value-add assets, the company buys and upgrades one portfolio at a time. "We'll look at add five to six properties every nine months," Jakab says. "As soon as this portfolio is stabilized and we're comfortable with it being on track, I'll put together another partnership to buy some more."

The Whittaker Lauderdale portfolio consists of the 340-unit Westbrook Place Apartments at 7825 Corporate Dr., which has been renamed to The Lodge Apartments; the 294-unit Waterstone Apartments at 7502 Corporate Dr., which was renamed Waterfall Park Apartments; the 252-unit Greenridge Park at 1351 Greens Pkwy., which is now Live Oak Bend Apartments and the 155-unit Wayforest Glen Apartments at 17601 Wayforest Rd. which was renamed Courtyard Manor Apartments. The 224-unit Ashford Point Apartments at 3950 Ashburnham Dr. will operate under the same name. The portfolio's average unit size is 778 sf, and in-place rents average $642 per month.

CBRE executive vice presidents G. Craig LaFollette and J. Todd Stewart, senior associate Tre T. Banks and associate Christopher Curry teamed with Marix to represent the seller. David Fantin of Lifestyles Realty Inc. represented the buyer. Andy Hill with Capmark Financial Group Inc.'s Houston office handled the financing.