$16.6M-Plus Sale Bankrolls 176-Unit Retooling

JEL Investments Ltd., through subsidiary Williamsburg Properties Ltd., has acquired the Williamsburg Apartments at 12660 Hillcrest Rd. from TXCGL Properties of Hartford, CT. Ames Pinheiro, Williamsburg Properties' vice president, tells GlobeSt.com that it will take two years to work through the existing leases, but the plan is to roll over the units onto the for-sale market as pacts expire.

Pinheiro says the building was optioned after "three or four" other bidders fell by the wayside in the 1 /12 years that the 13-building complex was on the market. Williamsburg Properties will manage the property.

Exterior renovations will be done over the course of the next six months at the gated community. Interiors will be done at sale time, with buyers being given the option for extra upgrades.

JEL Investments tackles one project at a time, according to Pinheiro. In December 2001, it finished up an identical undertaking for the Montfort Townhomes at 14400 Montfort, also a North Dallas property. The North Dallas address, says Pinheiro, was key to the decision to buy the Williamsburg Apartments, situated on 10 acres. "We felt that alone made it stand out," he says.

Randall Fleisher of Houston-based L.J. Melody arranged a $16.5-million financing, representing 93% of the cost to acquire, renovate, market and sell the condos. Pinheiro says Williamsburg Apartments, unlike other conversion projects, has a design advantage because it was laid out for that intent in 1986, but market conditions at the time made it more conducive to renting than selling. The condos will be put on the market for $115,000 to $175,000 apiece.

Mountain Funding LLC of Charlotte, NC provided the financing through a one-stop, high-leverage loan program designed for value-add income properties. Peter Fioretti, Mountain Funding's president and CEO, says all costs are rolled into one loan so "the borrower avoids wasting time and money normally involved in inter-creditor agreements, as well as multiple due diligence processes, attorneys and third-party professionals." In return for the non-recourse, three-year loan, Mountain receives a blended combination of interest and fees: 9.25% floating interest; 2.25% commitment fee; condo release fee equal to 0.5% of sales; and exit fee, in lieu of equity, of 5.25%.