AmeriSouth, GMAC Negotiate Double Buy

AmeriSouth bought the note for Bachman Glen Apartments, built in 1971, at 2555 Webb Chapel extension from the Horsham, PA-based GMAC. Jeff Ratliff, AmeriSouth's EVP, tells GlobeSt.com that the note cost $600,000 and the rehab, started with out-of-pocket capital, will bring $750,000 in improvements to a complex with just nine apartments occupied at closing. John Brownlee of Holliday Fenoglio Fowler LP's Dallas office is packaging a loan, which should close in 30 days, to cover the renovation cost.

Thomas Moran of Focus Realty in Dallas brought the deal to AmeriSouth, which foreclosed on the four-year owner, Bachman Glen Partners LP, as soon as it had the note in hand. In taking over the asset, AmeriSouth got the job of bringing the complex up to code. Ratliff says the compliance issues and the mostly vacant status drove GMAC to sell a note with a $1.3 million balance at a steep discount. "It's a class F that's going to be a class C plus," Ratliff vows.

Meridian Construction of Dallas is doing a full makeover, including mechanical systems and unit interiors, at the five-acre development. Ratliff says units presently rent for 60 cents per sf, but that price will rise to 74 cents per sf, with all-bills paid, after the work is done. The complex consists of 28 one-bedroom units of 748 sf; 35 two-bedroom, one-bath designs ot 918 sf; and 11 two-bedroom, two-bath apartments of 986 sf.

AmeriSouth most often steers clear of high-density multifamily areas like Bachman Glen's location. But in this case, "the price was right," Ratliff says of the decision to tackle a repositioning in a submarket where occupancy is hovering at 90% and competition is stiff.

AmeriSouth, led by Ruel M. Hamilton, also bought Imperial Courtyards at 430 W. Sixth St. in Irving from GMAC in a straight-up deal with a $1.5 million price tag after the city sliced three acres from the 7.5-acre tract using eminent domain to get more land for a $7.5 million public park with a lake and hike and bike trails. As a result, the one-time 91-unit complex was pared to 74 apartments.

Ratliff says the 85%-occupied complex is in line for a $400,000 facelift, with Meridian Construction stepping in to finish work started by GMAC after it foreclosed awhile back. Units mostly are two bedrooms, averaging 953 sf, that rent for 71 cents per sf, all-bills paid. Ratliff says the immediate plan will keep the existing rent in place with the upside coming from improved occupancy and a location just a half-mile from another AmeriSouth property.

Brownlee financed the acquisition and construction loan with Comerica Bank's Dallas office, packaging a two-year loan with a floating rate of Libor plus 330 basis points. Brian O'Boyle of O'Boyle Properties in Dallas represented GMAC. Ratliff was AmeriSouth's broker on both deals to take this year's acquisitions count to 1,000 units.