KMR-Garden City LP, comprised of private investors from several cities in the state, received 10 to 15 offers for the 98%-leased complex at 9601 W. Montgomery Rd. The bidding pool was significantly narrowed when the seller required assumption of the 10-year HUD loan as part of the sale. "The seller had a huge prepayment penalty," explains Jeff Eisenhardt, senior adviser for Hendricks & Partners in Houston.

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-rate loan and a solid reputation for owning HUD properties. GH Capital also owns the 160-unit Branch Village Apartments at 7601 Curry Rd. in the far north submarket.

Eisenhardt tells GlobeSt.com only one other Houston-based subsidized housing complex had a higher per-unit sales price: the 232-unit Arbor Court Apartments at 802 Seminar Dr. on the far north side. Arbor Court sold last year for $37,716 per unit.

Eisenhardt points out that Houston is in a seller's market as it pertains to subsidized housing, which is why sales prices are a little higher. "While this is a buyer's market for standard-rate apartments, in terms of subsidized properties, there are more interested buyers than available properties," he adds.

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