Two Class C Complexes Corner $2.9M All-Cash Buyer

The 100-unit Spanish Gate Apartments at 3550 E. Seminary Dr. brought about $1.8 million and the 72-unit Edgewood Oaks complex at 511 Edgewood Terrace went for $1.1 million. The partnership, with capital ties to Minnesota and Idaho, intends to pump about $150,000 into each property, raise the rent and re-tenant to some extent and then return them to the market for resale or refinance, Jeff Ratliff, executive vice president of AmeriSouth Realty Group in Dallas, tells GlobeSt.com.

Seller John K. Baker has been hawking the class C portfolio on a piecemeal basis since the year began. A 165-unit complex is under contract and could close in 45 days, Ratliff says. Brandon Rutledge of AmeriSouth, led by Ruel M. Hamilton, has been handling most of Baker's sales.

Spanish Gate, a 94%-occupied property, brought eight offers in 45 days of marketing while the 93%-leased Edgewood Oaks baited 10 offers in a 90-day sales period. According to Ratliff, some offers bested the buyers, but their ability for a quick close and cash on the line swung the decision their way. To close Edgewood Oaks, a city lien for code violations and utility bills were cleared from the record, he confides, noting the seller owned the assets for six years. The transactions were handled separately, but timed to close on the same day--turning the deeds in just one week.

The properties are resting about $50 below market rents, a strategy employed by Baker who ups occupancies by keeping rates low. Spanish Gate gets an average of 70 cents per sf for one, two- and three-bedroom units averaging 899 sf. Edgewood Oaks' carries a 71-cent per sf average for a mix of one- and two-bedroom units with a 457-sf average. "Both have considerable upside once the work is done," Ratliff says.