Race Ends for 149-Unit Foreclosed Complex

GMAC Commercial Mortgage Corp. of Philadelphia went for the quick close on a 55%-occupied, foreclosed property at 201 Skyline Circle in an older section of town with strong leasing appeal to a "preferred tenant base," says Jeff Dowdle, investment associate with Marcus & Millichap's Multi Housing Group in Dallas. He tells GlobeSt.com that the buyers essentially had the same offer--the mid-$2.5-million range--on the table, but one was able to do the deal in three weeks instead of four.

GMAC, which foreclosed in January, was holding a $2.4-million note of Moshe Epstein of the Arlington area, who's had several multifamily assets roll into foreclosure in the past year in Dallas-Fort Worth and Houston, Dowdle says. GMAC made immediate repairs, hiring Majestic Realty of Dallas to act as intermediary with the city to bring the property into compliance to ready it for resale.

Epstein acquired the 12-building development on six acres in 1998. Tarrant County has the property assessed at close to $3.1 million.

The new owner, who plunked down all cash for the close, will invest at least $500,000 into upgrades inside and out, change the name and re-tenant. The all bills-paid complex has 38 one-bedroom, one-bath units in 735-sf layouts that rent for $525 per month; 101 two-bedroom, one-bath designs of 902 sf, with a $625 tab; and nine three-bedroom, one-bath floor plans, 1,100 sf for $750. "There is significant upside in the deal," Dowdle says, adding rents could jump $30 to $40 per unit once the rehab is done. Legend Asset Management of Arlington is the new overseer.

Epstein hired Dowdle in July 2002 to sell the class C complex, but for a considerably higher price. Dowdle says it went under contract twice and fell out before GMAC foreclosed, causing him to scramble for the listing one more time. Buyer Jack Kofdarali, who acquires under the name of J&R Oil, became a likely buyer once it moved to foreclosure because the preference is to buy cheap, repair, refinance and most often sell for a profit. Dowdle says the asset could fetch $4.5 million "pretty easily" once it's repositioned.

Norman Eastwood, senior investment associate and director of Marcus & Millichap's Multi-Housing Group, says the Corona investor's goal is to "provide quality affordable housing in Grand Prairie." He and Dowdle represented buyer and seller.