KMR-Garden City LP, comprised of private investors from severalcities in the state, received 10 to 15 offers for the 98%-leasedcomplex at 9601 W. Montgomery Rd. The bidding pool wassignificantly narrowed when the seller required assumption of the10-year HUD loan as part of the sale. "The seller had a hugeprepayment penalty," explains Jeff Eisenhardt, senior adviser forHendricks & Partners in Houston.

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Eisenhardt, who brokered the transaction with Hendricks &Partners senior adviser Kevin McCarthy, says the Sherman Oaks,CA-based buyer had the willingness to take on the 5.87% fixed-rateloan and a solid reputation for owning HUD properties. GH Capitalalso owns the 160-unit Branch Village Apartments at 7601 Curry Rd.in the far north submarket.

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Eisenhardt tells GlobeSt.com only one other Houston-basedsubsidized housing complex had a higher per-unit sales price: the232-unit Arbor Court Apartments at 802 Seminar Dr. on the far northside. Arbor Court sold last year for $37,716 per unit.

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Eisenhardt points out that Houston is in a seller's market as itpertains to subsidized housing, which is why sales prices are alittle higher. "While this is a buyer's market for standard-rateapartments, in terms of subsidized properties, there are moreinterested buyers than available properties," he adds.

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Built in the 1970s on 12.3 acres in the near north submarket,Garden City Apartments has 29 buildings with one- to five-bedroomunits. The average unit is 843 sf while the average monthly rent is$763.

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