Tight Turnaround Met Amid Record Absorption

DALLAS—Park Ninety Six 90 is a 506-unit garden style multifamily community located approximately 16 miles northeast of the CBD. The property was renovated between 2014 and 2018, with slightly more than $3.5 million spent on interior upgrades to 168 units and updates to various amenities such as the swimming pools and fitness facility.

Recently, a first mortgage bridge loan in the amount of $35 million provided the financing for the acquisition and renovation of the multifamily property. Hunt Real Estate Capital provided the bridge loan to the sponsor, a joint-venture between Beverly Hills-based Concord Real Estate and New York-based Sun Equity Partners.

Loan proceeds were used to finance the acquisition in addition to funding both interior and exterior capital improvements. Future renovations include the upgrade of the interiors of 338 units, and a variety of exterior upgrades are planned.

The property is on a 19-acre site with 66 two‐story buildings and a three-story building for a total of 411,751 square feet. Park Ninety Six 90’s unit mix is comprised of 44 studio apartments, 303 one-bedroom units, 151 two‐bedroom apartments and eight three-bedroom units.

“This deal was unusual in that we needed to deliver firm committee approval in less than three weeks due to the borrower’s tight timeline imposed by the seller,” says Ted Nasca, managing director at Hunt Real Estate Capital. “Once we received approval, we were then in a position to fund within four weeks of receiving the signed application.”

Project amenities include three swimming pools, a clubhouse with a resident lounge, leasing office, fitness center, gated access, laundry facilities, playgrounds, dog parks, and grilling and picnic areas. The property also features an after‐school program.

“We were pleased to partner with this repeat Hunt Real Estate Capital client on this quality value-add property and happy it came together so well despite the timing issues that needed to be accommodated,” Nasca tells GlobeSt.com.

During the trailing 12 months ending in June, rental demand reached one of the highest levels in the past five years as a net 20,000 units were leased in DFW, according to a recent report by Marcus & Millichap. Record absorption has been met with a robust construction cycle as developers continue to target portions of the market for projects.

While pockets of the metroplex are receiving significant additions to stock resulting in some softening in vacancy, others have realized minimal supply increases. A combined 1,200 units have been delivered in the Northwest Dallas, Southwest Dallas and South Irving submarkets since 2013. These areas are located west of downtown Dallas and near other major pockets of growth and employment. Boasting some of the lowest vacancy rates at below 4%, these submarkets also have monthly rents $180 to $240 below the metroplex average, leaving room for above-average growth.

During 2018, deliveries remain more than double the historical average for a second consecutive year. While these units are largely in select north Dallas submarkets, steady job and wage growth throughout the metroplex promote a healthy pace of household formation. The number of residents seeking housing in the metroplex continues to rise this year as approximately 60,000 new households  are created. A large share will funnel into apartments, helping keep the overall vacancy rate 110 basis points below the previous 15-year average, says Marcus & Millichap.

With this acquisition, Concord Capital Partners now owns more than 2,000 units in the Dallas metroplex and its current portfolio is valued in excess of $1 billion.