Summit Sells Last Multifamily Asset in Texas

With today's market, high-end apartment properties are reaping about 92% of their asking prices. San Raphael, a class A plus that fueled strong interest, debuted on the market in July for $21 million. Developed in 2000 by the Boca Raton, FL-based Gables Residential, the 14181 Noel Rd. asset was pushing 98% occupancy at sale time to the Hayman Co. of Troy, MI.

Hayman's private capital was "neck and neck" with an institutional buyer as the top offers on the table in a stack of 22, Will Balthrope, director of Cushman & Wakefield of Texas Inc.'s multi-housing group, tells GlobeSt.com. The deal crossed the closing table 30 days after Summit made its decision, says Don Ostroff, the other point man for a C&W team that logged $341 million in sales last year for 25 properties with 6,913 units. And, the team, which includes Susie Kakos, marked its highest per door and per sf price for 2003 with the San Raphael sale.

Summit ticketed Texas as a market to exit just months after it acquired the San Raphael in July 2002 for $17.7 million from Gables. The listings were held by several brokerage firms, but the C&W team made the first sale in the stack April 15, 2003 and traded the last Dec. 30.

Hayman's other eight multifamily assets in Dallas/Fort Worth are suburban properties and none of the San Raphael caliber, the brokers say. "This was a real step up in asset class and location," Balthrope adds. The deed changed hands with a new loan from Wachovia Bank in Charlotte, NC.

Built on 4.9 acres in the shadow of the Galleria Mall, the complex has 45 units per acre and brings in rents of $1.11 per sf or an average of $1,000 per month for apartments averaging 898 sf. The mix contains 126 one-bedroom apartments and 96 two-bedrooms.Balthrope says the listing baited offers from seven institutions. "We are seeing institutions starting to come back to Dallas," he says of renewed interest sparked by a soft market.

The Carrollton, TX-based M/PF Research Inc.'s fourth-quarter numbers issued this week showed the Dallas occupancy of 88.9% is second only to Houston out of 58 US markets surveyed. And both, like all cities in the struggle, have concessions undermining rents while driving trade-ups by Dallas tenants to keep class A units at a somewhat higher occupancy or at least on par with the city average.