334-Unit, Class A Dallas Complex Sells

The Boca Raton, FL-based Gables bought the 334-unit Archstone Knoxbridge and immediately renamed it to Gables Knoxbridge. The class A acquisition was built in two phases along Cole Avenue, just a block north of the Knox Street historic district, an eclectic mix of boutique shops and dining establishments.

According to Archstone-Smith's SEC filings, it has 24 apartment communities up for grabs nationwide. It could not be learned by publication time if all six in Dallas-Fort Worth are on the REIT's "to go" list, but it does have several others listed for sale with brokers around town. Based on information on Archstone-Smith's Web site, Texas isn't labeled a core market.

Jeff Price of the Apartment Group in Dallas brokered the sale for Archstone-Smith, but he's not talking about the deal, except to say that "it is a high barrier to entry location." Occupancy, price and the number of other offers that came in for the property are all off limits due to the seller's confidentiality clause in the contract.

The complex was built in two stages in 1993 and 1995 and then remodeled in 2000. The Gables' acquisition encompasses about 14.7 acres, with units that rent from $850 for a one-bedroom, 642-sf apartment to $1,720 for a two-bedroom, 1,307-sf design. The Dallas Central Appraisal District assesses the 334 units at $24.5 million. In today's market, the selling price most likely exceeded the assessment, given investors' appetites for multifamily properties in Dallas-Fort Worth.

Gables, issuing a press release within three days of the purchase, said the Gables Knoxbridge acquisition helps shore up its "established premium neighborhood" zone in the Highland Park vicinity while simultaneously providing operating economies in the existing portfolio. The REIT's "research-driven strategy" focuses on markets with historically high job growth and resiliency to national economic downturns.

The Friday closing was trailed by a $6.5-million purchase of Archstone Management Services Inc., a third-party property management business with contracts at 32 communities with 10,665 units. The purchase price is to be paid in three installments, based on the retention of the contracts acquired, according to an Archstone-Smith press release. The final payment will be made in second quarter 2004.

As of March 31, Archstone-Smith had 24 communities on the market nationwide. In the first quarter, it sold six communities for a net gain of $129.4 million in a plan to unload some $600 million to $800 million this year, according to the REIT's latest SEC filing.