CBRE's Houston Multifamily Team Adds Market

"We haven't been actively pursuing the class C market," says G. Craig LaFollette, CBRE senior vice president in Houston. About 41% of the city's 450,000-unit inventory is class C controlled by "unquestionably private capital and private clients," he tells GlobeSt.com.

LaFollette believes the class C sector, thus far, has been underserved. He says they didn't work the class C market before, in part, because the firm's systems are designed for larger deals. Also, the 10-member team was intent on pushing for market share and the class C sector is more difficult to penetrate in terms of identifying and finding property owners.

Since the plan started working, some 360 properties have been identified as fitting the criteria for the chase. In Houston, the average class C property sells for about $30,000 per unit, which means the group will target sales in the $5-million to $7.5-million range.

LaFollette stresses the initiative isn't tied to sluggish class A and B multifamily sales. The CBRE Houston team racked up one of its best years in 2002 and 2003 is shaping up to be even better. This year, the team has closed sales 18 sales, totaling $190 million, and has another 10 properties under contract at a combined price of $170 million.

CBRE hired Jeb Cox, previously a project analyst in Houston for Atlanta-based Trammell Crow Residential, and more hires could be coming. LaFollette says Cox will be developing marketing strategies for the private capital markets that include the CBRE's tried-and-true strategies of "market research, asset positioning, financial modeling and access to buyers and properties in an integrated, rapid-fire process."